Regling: ESM could further improve the economic conditions of the Greek program

11 November 2015
163 Views

Member states will monitor the implementation of reforms by Greece and decide whether to enter into discussions on further debt relief, the general director of the European Stability Mechanism (ESM) Klaus Regling said during a conversation with MEPs of the European Parliament Committee on Economic and Monetary Affairs.

However, he underlined that a haircut in the nominal debt of Greece is not on the cards nor the IMF suggests something like that. “My opinion is that this is not necessary,” he said, stressing that the Greek debt is sustainable for the next ten years.

“Greece has already benefited significantly from the European Financial Stability Facility (EFSF) and the ESM. We have already paid loans totaling 143 billion euros corresponding to 45 percent of the entire Greek debt. We did this on very favorable terms for Greece. These loans have maturity time on average 32 years and a very low rate of approximately 1 percent,” he said and pointed out:
“These generous loan terms provide for significant savings each year in the Greek budget. These profits – what economists call ‘net present value’ – are equivalent to a haircut in the case of Greece. If you also add the favorable terms from the official European lending, the benefit equals a 50 percent haircut for Greece. But this is very different from the nominal debt haircut.”

Regling stressed that the ESM could further improve the economic conditions of the program, given that Greece meets its commitments for reform. “For example we could lengthen the time of maturity of the loans and postpone the imposition of an interest rate.”

Regarding the role of the European Parliament, he stated that any official role is not provided for the EP in the negotiations on the support program. “In order for the European Parliament to play an official role, the ESM should radically change the decision-making process. This could happen if member states decide to integrate ESM in the EU treaties,” he underlined.

You may be interested

Longest Balkan railway tunnel opens in Greece (VIDEO)
GREECE
shares69 views
GREECE
shares69 views

Longest Balkan railway tunnel opens in Greece (VIDEO)

makis - Feb 20, 2018

The longest tunnel in Greece and the Balkans was finally opened to rail traffic this week after years of construction.…

Turkey renews the NAVTEX that blocks the drillings in the Cypriot EEZ!
GREECE
shares56 views
GREECE
shares56 views

Turkey renews the NAVTEX that blocks the drillings in the Cypriot EEZ!

makis - Feb 20, 2018

The illegal NAVTEX in the sea area of Block 3 in the Cypriot EEZ has been renewed by the Turkish…

Is Italian ENI drilling ship abandoning Cyprus after Turkish aggression?
GREECE
shares78 views
GREECE
shares78 views

Is Italian ENI drilling ship abandoning Cyprus after Turkish aggression?

makis - Feb 20, 2018

The SAIPEM 12000 drilling ship from Italian energy company ENI is preparing to depart the “Supa” target in sea block…

Leave a Comment

Your email address will not be published.