Greek Finance Minister Euclid Tsakalotos said on Tuesday that any agreement on Greek debt relief should include grace periods of 15-20 years that would encourage long-term investment.
“It is absolutely vital that we get a clear runway so that people understand that investors can invest for seven, eight, nine years,” Tsakalotos said in a lecture at the London School of Economics.
But EU lenders would not discuss the question of Greece’s debt burden, which stands at 200pc of GDP, until after the Spanish elections are held, on 20 December with the debt talks starting in the new year .
“The promise was that we would have a discussion on debt immediately after the first [bail-out] review and have deal before Christmas,” Tsakalotos told the audience.
“But we won’t have a deal because Spain has an election and [creditors] don’t want … to encourage the ‘wrong people’.”
Euclid Tsakalotos said EU lenders would not discuss the question of Greece’s debt burden, which stands at 200pc of GDP, until after the Spanish elections are held in the new year.
“The promise was that we would have a discussion on debt immediately after the first [bail-out] review and have deal before Christmas,” he told an audience at the London School of Economics on Tuesday night.
“But we won’t have a deal because Spain has an election and [creditors] don’t want … to encourage the wrong people.”
The International Monetary Fund has called for a bold programme of debt write-offs for Greece and moratoriums on repayments for up to 40 years. The Fund has refused to take part in a new €86bn bail-out until a debt write-off has been agreed.
EU creditors, however have resisted opening up the question of haircuts or repayment extensions until Athens has managed to “front-load” most of its austerity reforms. Mr Tsakalotos’s comments suggest creditors fear they will unleash a new wave of debt relief calls in former bail-out countries.
Chief among them is Portugal, which joined Greece as Europe’s second left-wing regime after its conservative government collapsed after just 11 days on Tuesday. The country’s radical Left Bloc and Communists have called for a mass debt restructuring of its near 280pc debt mountain.
Edited – YXamonakis
