Handelsblatt: ESM, Paris submit Greek debt relief plan linked with 5-year growth rate
The European Stability Mechanism (ESM) and France have reportedly submitted a plan to link debt relief for still-bailout dependent Greece with the country’s growth until 2050, Handelsblatt reported on Tuesday, citing a document dated Feb. 27, 2018.
If confirmed, the plan would mean a previous high-profile French proposal to link Greek debt relief with growth has taken a substantive form.
As previously reported when the proposal was first made by Paris, including by French President Emmanuel Macron, relief would come through extending maturities, capping interest rates on extended loans and other growth-pegged terms.
Handelsblatt claims the document foresees that repayments will be suspended if the average five-year growth rate in the country, as a percentage of GDP, is below 2.8 percent.
Partial repayments would come if GDP growth hovers at between 2.8 and 3.4 percent; full repayment is foreseen with GDP growth exceeding 3.4 percent.
The German daily notes that former German FinMin Wolfgang Schaeuble was a vocal opponent of such a prospect, with Athens now hoping that his successor, Olaf Scholz, will have a different opinion.
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