Euro area finance ministers will seek to conclude a review into Greece’s bailout programme next week, as officials claimed a breakthrough on agreeing the reform package that Athens must deliver and signaled willingness to grant the country some form of debt relief.
Ministers and officials from the International Monetary Fund are planning to meet in Brussels next Thursday to reach a “political agreement” that would be “very important for Greece and the eurozone,” Jeroen Dijsselbloem, the president of the Eurogroup, told reporters at an informal gathering of ministers in Amsterdam on Friday.
However, Mr Dijsselbloem said he’s not yet certain that the meeting will happen, adding that it depends on progress made between now and then.
Mr Dijsselbloem said that an agreement had been reached on the principle that Greece will prepare a “contingent” bundle of additional economic reforms that could be taken if the country starts to slip in meeting debt and deficit targets in the period to 2018, writes Jim Brunsden. “This needs further work, the design of that, how it would work, what the measures would be and how we would trigger it,” he said.
Ministers are also ready to begin discussions on possible options for granting Greece some debt relief, Mr Dijsselbloem said, while emphasising that there was no appetite in the Eurogroup for accepting “nominal haircuts” on Greece’s debt load.
Christine Lagarde, managing director of the International Monetary Fund, said that Greece’s debt load can be made sustainable without an outright haircut, adding that other options for granting Greece relief, such as extending maturities, could be enough to make the country’s debt sustainable.
“I believe that no haircut is needed so the nominal value of the debt doesn’t have to be changed,” Ms Lagarde said.
Greece “will probably require a reprofiling of the debt using multiple mechanisms but that this would be triggered when needed, that is upon completion of all the measures that are being discussed at the moment and based on realistic forecast going forward,” she said.