Debt Relief for Greece Being Considered

Written by | Tuesday, May 6th, 2014

As economic growth slowly gains momentum in the Eurozone, the European leadership has started discussing the possibility of new debt relief for Greece. The latest economic forecast shows continuous growth across EU28, which feels like a good time to elaborate on the future of Greece’s 319-billion-euro debt out of which 80 percent is held by Brussels. Signs of economic recovery are on the rise even in Greece, which is expected to return to growth this year. The first meeting on the Greek debt took place on Monday (5 May) before the meeting of all EU finance ministers in Brussels.
Commission Vice-President, Siim Kallas, said there was a chance that debt relief would be increased at both meetings and added that debt reduction was a very important and big question to be discussed by creditors. Yet, it is not believed that there will be a lot of space for maneuver although all the steps will be discussed with member states. Last month, following the meeting with Greek fiscal authorities, some international lenders confirmed that Greece would obtain more debt relief. The country had achieved budget surplus and returned to the bond market, thus ending a four-year exile from financial markets.
The EU also appreciated the decision of Lisbon to choose a “clean exit” from its 78-billion-euro bailout. The Portuguese government announced during the weekend (3-4 May ) that it would not opt for a precautionary credit line as a safety measure against possible future financial troubles. As a result, Portugal has become the second Eurozone country after Ireland to have exited the system, which means that Lisbon will no longer have to conform to foreign creditors after the end of bailout on May 17. Generally, the European economic recovery is on a good way and, as Siim Kallas stressed, deficits had declined, investment was rebounding and the situation in the labor market had been improving.

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