Business World

Saturday 18 November 2017

EU examines Greek debt options as key talks begin

Thomas Molloy

Thomas Molloy

SENIOR eurozone finance officials met yesterday to find ways to bring Greek debt closer to the 120pc target before Finance Minister Michael Noonan and his EU counterparts gather in Brussels today for two days of talks.

"If you do a number of things you can bring the 129pc close to 120pc," one eurozone official familiar with a discussion document said.

Changes to interest accrued on privately held bonds may help the ministers seal a deal this week, Reuters reported.

Interest rates on EU loans to Greece could be cut, and those national central banks in the eurozone which hold Greek bonds might accept similar terms to private creditors.

Japan and China agreed yesterday that they would jointly respond to any funding request from the International Monetary Fund, which is looking to more than double the size of its war chest to help countries such as Ireland deal with the crisis.

Japanese Finance Minister Jun Azumi, after meetings with Chinese Vice Premier Wang Qishan and Finance Minister Xie Xuren, said the two countries were ready to support the IMF, but further efforts by eurozone members were necessary.

"What we agreed on... is that European countries need to do more, although (the situation), including Greece, is headed in a good direction," Mr Azumi told reporters in Beijing.

"We can expect some sort of request from the IMF to those including the United States, Japan and China. We agreed that Japan and China will co-ordinate closely and will jointly respond to the IMF."

The IMF is seeking to raise $600bn (€455bn) in new resources to help deal with the eurozone debt crisis but countries outside of the 17-country euro bloc want to see its members stump up more money before they commit additional resources to the IMF.

Mr Azumi said the two sides did not discuss the size of any funding support for the IMF although a Japanese finance official said Tokyo was willing to commit a "sizeable" amount.

"The idea is Japan and China will co-ordinate, not compete, on any IMF action," the official said, adding that both countries were fully aware of their importance in dealing with the crisis.

China, which has been consistently reluctant to make firm financial commitments, is seen as having the financial firepower to bail out some European governments given its $3.2 trillion worth of foreign exchange reserves at hand.

Earlier in the month, Chinese Premier Wen Jiabao said China was considering increasing its participation in the European rescue funds and was still studying ways to do so. (Additional reporting Reuters and Bloomberg)

Irish Independent

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