Lenders seek deal to bring down Greece′s debt | News | DW | 26.11.2012
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Lenders seek deal to bring down Greece's debt

Eurozone finance ministers and other international lenders are gathered in Brussels to discuss the way forward for financially stricken Greece. The idea of a fresh haircut appears to be off the table - at least for now.

For Greece's finance minister, the most immediate concern is getting the international policymakers who have funded its two financial bailouts to release the latest tranche of funds, worth 31 billion euros ($ 40 billion). Speaking to reporters as he arrived in Brussels on Monday, Yannis Stournaras appeared optimistic.

"I'm certain we will find a mutually beneficial solution today," Stournaras said.

The European commissioner for economic and monetary affairs, Olli Rehn, stressed the importance of releasing the funds “to end the uncertainty that is still hanging over Greece.”

While there is a consensus that Greece has met the preconditions to receive the latest tranche, there is no agreement on how to help Athens bring down its debt, which is expected to peak at around 200 percent of gross domestic product over the next two years, to 120 percent by 2020.

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Eurozone finance ministers meet

The International Monetary Fund (IMF) has held up the release of the latest funds, demanding that a plan for bringing down Greece's debt to a sustainable level be reached first.

Speaking ahead of the talks, IMF Managing Director Christine Lagarde (pictured above) said she intended to work "for a solution that will be credible for Greece."

No 'haircut'

There are a number of tools that could be used to help Athens bring down its debt, including a debt buyback, reducing the interest rates charged on Greece's loans, or extending the duration of its loans.

One possibility that now appears to be out of the question, though, is the idea of eurozone countries forgiving some of the Greek debt they hold – something that is popularly referred to as a "haircut."

German Finance Minister Wolfgang Schäuble said prior to the meeting that this was not possible in Germany or anywhere else in the eurozone due to “national laws.”

Earlier, Jörg Asmussen, a German member of the European Central Bank's executive board, also said debt forgiveness was off the agenda, at least for the time being.

This is the fourth such meeting in the past three weeks. It was expected to continue late into the night.

pfd/dr (Reuters, dpa, dapd)

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