Reuters — The European Union should discuss debt relief for Greece and potentially move ahead even without the International Monetary Fund, Portuguese Finance Minister Mario Centeno said in an interview published Tuesday by the Bild newspaper.
“We have to start this discussion,” the German newspaper quoted Centeno as saying.
Euro zone finance ministers are due to discuss wide-ranging debt relief for Greece when they meet next month, but German Finance Minister Wolfgang Schaeuble has opposed such measures, saying it would weaken efforts to enact further reforms.
“The European currency union has very strong institutions in the meantime. We can deal with most problems on our own,” the newspaper quoted him as saying.
Centeno also said that Europe’s Stability and Growth Pact should be reworked and replaced. The current debt rules have “a lot of room for improvement,” he said.
The Stability and Growth Pact (SGP) is an agreement among the 28 Member states of the European Union, to facilitate and maintain the stability of the Economic and Monetary Union (EMU). It consists of fiscal monitoring of members by the European Commission and the Council of Ministers, and the issuing of a yearly recommendation for policy actions to ensure a full compliance with the SGP also in the medium-term.
If a Member State breaches the SGP’s outlined maximum limit for government deficit and debt, the surveillance and request for corrective action will intensify through the declaration of an Excessive Deficit Procedure (EDP); and if these corrective actions continue to remain absent after multiple warnings, the Member State can ultimately be issued economic sanctions.
