The euro zone and International Monetary are struggling with Greece’s debt crisis – not with Athens this time, but with each other over when to give Greece a break on its future massive debt repayments.
The euro zone has begun talks on debt relief for Greece but wants to postpone the final decision until 2018; the IMF insists Greek debt repayment is unsustainable and investors need clarity now.
Euro zone finance ministers are likely to forge a tentative plan when they meet next Tuesday – what in Brussels-speak is known as a political agreement. But their offer is unlikely to be anything but highly conditional, euro zone officials preparing the talks said.
The gist is to find a way to lower Greece’s debt-repayment burden without actually cutting the debt itself via a so-called haircut. Instead, Greece’s debt would be “re-profiled” – less interest, longer maturities, limits based on growth etc. Read more