ESM says looking at options to ease Greece debt

20 April 2016
817 Views

The European Stability Mechanism has acknowledged that it is considering ways to grant debt relief to Greece, possibly by fixing the interest level at current low rates or by extending its maturities further.

The ESM said in August 2015 that euro area finance ministers stood ready to consider, if necessary, possible additional measures to make Greece’s debt sustainable. However, the agency said it would only do so if Greece complied with its reform obligations under the ESM programme and ruled out any nominal haircut on official debt.

“In the light of this commitment the ESM has started to look into possible options on a purely technical level,” the ESM said in a statement on Wednesday.

“These options have not been discussed at a political level. Any potential decision on further measures to alleviate Greece’s debt burden can only be taken by a unanimous vote among all euro area Member States.”

It did not give any details on possible options.

Last year, the anti-austerity SYRIZA party came to power in Greece calling for a haircut on the principal of its huge debts, most of which are with the official sector, such as the ESM and the International Monetary Fund. But restructuring IMF debt has never been done and eurozone politicians ruled out a haircut last August when they reached agreement with Greece about its latest 86 bn euros bailout package.

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