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Wednesday 13 November 2019

Little Eurozone appetite for Greece debt write-down - Eurogroup chair

Eurogroup chair Jeroen Dijsselbloem
Eurogroup chair Jeroen Dijsselbloem

Colm Kelpie in Brussels

There is little appetite within the Eurozone for a debt write-down for Greece, Eurogroup chair Jeroen Dijsselbloem said today.

Mr Dijsselbloem, who chairs the 19-strong group of Eurozone finance ministers, also signalled that the country must abide by the rules of the Eurozone.

Greek anti-bailout leftist party Syriza swept to victory in a snap election yesterday, with leader Alexis Tsipras promising that five years of austerity, "humiliation and suffering" imposed by international creditors were over.

''Working within the Eurozone means they will comply with all the rules and agreements that we have within the Eurozone, and on that basis, we will support them where we can,'' Mr Dijsselbloem said in Brussels.

''We have already done a lot to take off the debt burden, by reducing interest rates, allowing longer periods for them to repay loans, so there doesn't seem to be a great urgency there.

''Writing off debt in nominal value, I don't think there's a lot of support for that in the Eurozone.''

On his way into the Eurogroup meeting, Finance Minister Michael Noonan said things were ''vastly different' between Ireland and Greece.

''While I would have a lot of sympathy for the Greek people, things are vastly different,'' he said.

''My programme is to continue to make the Irish debt even more sustainable. But there are absolutely no market concerns now about Irish debt because of what we've done, that's why our interest rate is at 1pc on 10-year [debt].''

He also said there was scope for restructuring of Greek debt.

But he said he didn't believe the idea of a debt conference was necessary yet.

''Cyrpus and Greece and Portugal and Ireland and Spain have all been resolved by negotiations at Eurogroup and Ecofin, and there's no suggestion that that model won't work again,'' he said.

He said the issue for Greece was not debt cancellation, but the affordability of the debt.

''That means the interest rates and maturities,'' Mr Noonan said.

''I would suggest the way forward is to make the debt affordable by restructuring and we'll see then the way the new Greek government handles the negotiation.''

The German government stuck to its view yesterday that a third haircut, or debt restructuring, for Greece was out of the question but opened the door to a possible extension of Greece's current bailout programme.

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