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Brussels to Greece: Forget Debt Haircut

brusselsA haircut on the Greek debt capital will not be discussed, said several EU executives, including Prime Minister of Finland Alexander Stubb, according to a report in
“There is no political will among euro zone member states for debt writeoff on capital bilateral loans or loans from the European Financial Stability Facility (EFSF), this negotiation will never be done,” said an EU official to
“If a member of the Greek government comes and asks that, he will face the anger and indignation of his 18 partners, the European Commission and the European Central Bank. Deletion of official debt will not be done,” the official clarified.
He also added that there will be no new negotiation on the Greek debt because the debt is viable, the bailout program is agreed upon until 2022 and that agreement should be respected by the Greek side.
The EU official said that Greece has payments due in March and June and will probably need new loans after the elections. There is a strong possibility that the new government will need a third bailout program since an Enhanced Conditions Credit Line (ECCL) is out of the question now that conditions have changed.
He also added that Greece should negotiate with the Eurogroup and the troika of international creditors and not with individual country leaders such as German Chancellor Angela Merkel or French President Francois Hollande. He said that Prime Minister Antonis Samaras has made that mistake in the past and tried to get support from European leaders. He foresees that SYRIZA chief Alexis Tsipras will be making the same mistake in trying to negotiate with key European leaders instead of the troika and the Eurogroup.
Finally, according to, the official said that the new Greek government will have the same obligations as the current one. Namely:
The 2.43 billion euros fiscal gap in the 2015 state budget should close; the reorganization and consolidation of pension funds should be completed; the issue of red loans and primary residence auction should be resolved; the layoffs in the public sector should be completed; privatization should be promoted.

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