Eurozone ministers try to bridge Greek debt relief differences

Discussions on debt relief for Greece amid deep divisions over how much leeway to show leftist-led Athens

Afp April 22, 2016

AMSTERDAM: Eurozone finance ministers launched thorny discussions on debt relief for Greece on Friday amid deep divisions over how much leeway to show leftist-led Athens in its huge bailout programme.

"I'm just a happy man that we can start this debate and that is a good move forward," said Eurogroup chief Jeroen Dijsselbloem, arriving for a meeting of the single currency bloc's 19 finance ministers in Amsterdam.

Last July, Greek Prime Minister Alexis Tsipras secured Greece's third bailout in five years, worth 86 billion euros ($95 billion), but only in return for deep reforms.

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However, in one of the few concessions handed to Greece, eurozone leaders agreed to also debate ways of easing Greece's debt burden once key reform pledges were met.

Debt relief is also a key demand of bailout partner, the International Monetary Fund (IMF), which believes no economic programme would be credible without it.

The fund, headed by Christine Lagarde, has made it a condition to remain a partner in the rescue of Greece.

"The programme has to walk on two legs," Lagarde said, as she arrived for the talks.

"There has to be sufficient reforms, and we are making some progress on that front... and there has to be debt sustainability at the end of the day," she added.

The EU said on Thursday that Greece's debt stood at 177 percent of gross domestic product (GDP) in 2015 -- a level generally understood to be unsustainable.

The debt question is extremely sensitive in Germany, the eurozone's most powerful member, which insists that Greece's debt load is manageable so long as it reforms.

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"This topic is not the priority and above all, it should not distract us from what still needs to be done," said German Finance Minister Wolfgang Schaeuble.

The ministers met in Amsterdam as officials from the EU, European Central Bank and IMF are locked in crunch talks in Athens to close the first review of the bailout, which has been delayed since late last year by disagreements over pension cuts and bad loans.

Dijsselbloem, who is also Dutch finance minister, said the Greek negotiators had come a long way in delivering on reforms, despite the delays.

"Let's not be too harsh on the Greeks... These are major reforms and (will have) major impact on Greek society," he said.