Creditors: Greece's debt row

GMT 19:26 2015 Monday ,15 June

Arab Today, arab today Creditors: Greece's debt row

Greek flag waves in the breeze at Acropolis hill
Brussels - AFP

Leftist-led Greece and its EU-IMF creditors are locked in a tough bailout row that needs resolution before the end of June, when Athens is required to repay a huge debt to the IMF.

As the talks drag on into their fifth month, different priorities are emerging in the united front demonstrated so far by the creditors.

Here is a review of their similar, but at times conflicting, negotiating positions:


The IMF's participation in Greece's two massive bailouts has often been a bitter affair, and if the Washington-based fund had one wish, it would likely be to leave the rescue of Athens behind it forever.

Participating in Greece's two bailouts has been controversial at the IMF since day one, with non-Europeans at the fund reluctant for an institution designed to aid international development to get involved in the rich eurozone.

With the divisions deep, IMF head Christin Lagarde is under significant pressure within her organisation to give Greece, and the EU, little leeway.

Key for the fund is that Greece's debt remain sustainable, a difficult factor given that it now stands at a towering 180 percent of annual GDP.

In a blog entry on Sunday, just after talks collapsed, chief economist Olivier Blanchard warned that the debt question could return to the table.

Any further changes in budget targets "now or later, would probably require haircuts."

Lagarde meanwhile has repeated that any deal with Athens "has to add up" with an overhaul to pensions a key requirement.


Eurozone countries insist that Greece deliver on reforms before embarking on any other discussion about financing and a future beyond its current bailout.

"Greece has to focus on completion of programme - ... debt restructuring is not on the table," wrote Athens-critic Slovak Finance Minister Peter Kazimir in a tweet last week.

If Greece's debt is ever restructured, Germany and France, its biggest creditors, would have the most to lose.

German Chancellor Angela Merkel dismisses any talk of a haircut, the term for a debt write-off, while France more generously recognises "that the sustainability of Greece's debt load has to be assured."

As a whole, eurozone governments are fighting for a solution that would prevent Greece from leaving the currency bloc.

The much-feared "Grexit", could trigger contagion, with all minds turning to who might be the next victim.


European Commission head Jean-Claude Juncker has put himself forward as the ultimate broker in the tough negotiations with Greece.

The commission, the EU's executive, sees itself as Greece's most understanding party in the talks, even though it also insists that Athens hit its budget targets, though less rigidly than the IMF.

The commission pushes structural reforms, including big overhauls to the Greek work code and privatisations. It has also floated cuts to Greece's defence budget, the second highest in Europe after Britain.

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