23 October 2013

Kathimerini: Rehn says no decision on Greek debt relief until summer

Greece will have to wait until next summer to find out whether it will be granted further debt relief by its eurozone partners, and must be prepared for close monitoring of its public finances for many years to come, VP Rehn has revealed.

Resp onding to a question from SYRIZA MP Nadia Valavani during a conference in Lithuania, Rehn confirmed the speculation that there would be no discussion on how to reduce Greece’s debt burden any further before the European Parliament elections in May.

Rehn also underlined that Greece’s fiscal monitoring would not end when its bailout expires, regardless of whether that is next summer or if a third package is needed.

Since May 30 all eurozone members are bound by tighter fiscal regulations, which are known as the "Two Pack". The legislation obliges governments to publish their midterm fiscal plans and budgets in good time but also means that countries that are under an adjustment program will be subject to "very tight enhanced surveillance by the Commission and by the European Central Bank". The rules also mean that this monitoring will remain in place until a country has paid 75 percent of the loans it has received.

In Greece’s case, this means that the surveillance will be in place for at least another 25 years. 

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Meanwhile, Prime Minister Antonis Samaras has held talks with Deputy Premier Evangelos Venizelos on Wednesday, which culminated in the two men agreeing on a 12-page policy framework for their coalition.

The content of the policy framework sets out some of the government’s main aims and a number of the 43 points it contains refer to Greece’s inability to adopt further austerity measures. In what is seen as a clear message to the country’s lenders ahead of the EU summit, the document sets out what could be considered the coalition’s "red lines" in its discussions with the troika about the future of its bailout programme.

The policy framework sets out two targets that will help Greece "rid itself of the [EU-IMF] memorandum". Firstly, it says that the country will have to stick to its fiscal targets to make its debt sustainable and its economy more competitive but then suggests that the government will have to make Greece’s lenders "recognise the major sacrifices made by the Greek people" and that "the vicious cycle of recession and unemployment must be broken immediately". The second goal set out in the document is for the continuation of structural reforms "that allow Greece to become a modern, normal European state that is at the service of its citizens".

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© Kathimerini