Greece’s prime minister renewed an appeal to international lenders Wednesday to reach an agreement on easing the country’s debt burden, a day before finance ministers from the euro currency bloc meet to review its bailout program.
In an article written for France’s Le Monde and Germany’s Die Welt newspapers, Alexis Tsipras said that dealing with Greece’s debt, which stands at about 320 billion euros ($360 billion) or around 180 percent of the country’s annual gross domestic product, was key to future growth.
A deal was necessary, Tsipras wrote, “not so that money can be given away to Greece, but so that it doesn’t have to be given away.”
Finance ministers from the 19 European countries using the euro currency are meeting in Luxembourg Thursday to decide whether to unfreeze the latest installment of Greece’s rescue loans and to discuss potential debt relief measures to be enacted when the bailout program ends next year.
Greece’s left-led coalition government recently legislated more belt-tightening reforms, including pension cuts, in an effort to meet requirements for the disbursement of its latest long-delayed rescue loan installment. It needs the funds as it faces a roughly 7 billion euro spike in debt repayments in July which it will struggle to meet from its own resources.
Greeks, Tsipras wrote, are “full of hope and expectation for this meeting of finance ministers. Because we have done everything we owe and we continue on the same European path.”
“And we expect the same from our lenders. For them to respect the rules that they themselves wrote,” he added. “To respect my country. To respect Greece.”
Pierre Moscovici, the EU’s financial affairs commissioner, told German newspaper WAZ he expected Thursday’s Eurogroup meeting to conclude Greece had done enough on the reform front to get the bailout funds and that he hoped a “fair solution” would be reached on debt relief.
A key voice will be that of German Finance Minister Wolfgang Schaeuble, who has often taken a tough stance on Greece over the seven years of its bailout era.
In Berlin, Juerg Weissgerber, a spokesman for Germany’s finance ministry, said Schaeuble recently expressed optimism that an agreement would be reached.
“We believe that we can agree a sustainable overall package,” Weissgerber said on Wednesday.
But in Greece expectations appeared gloomier, with state-run media quoting an anonymous government official as saying the two sides were “very far” from an agreement.
The official was quoted as saying that if no decision was taken Thursday, Athens would ask for a eurozone leaders’ summit on the sidelines of a June 22 meeting of the EU’s heads of government.
Weissgerber, asked by reporters whether there might be a need for heads of government to meet over the issue, said that “in this case the Eurogroup is the body that’s responsible.”
European creditors had promised some form of debt relief if Greece implemented austerity measures. Athens has long argued that it needs some form of debt relief for its debt to be deemed sustainable, which would in turn help it return to the international borrowing markets.
But the issue has been complicated by disagreement between the Europeans and the International Monetary Fund, which participated in Greece’s first two bailouts, over the country’s growth potential and long-term debt sustainability.
J.P. Morgan’s Marco Protopapa and Aditya Chordia said Greece’s “expectations, strongly linked to (governing party) Syriza’s desire to receive a major political boost to a faltering electoral support, have long proved excessive.”
They anticipate that Greece will likely receive “unanimous praise” for its reform efforts and get a quick disbursement of cash but that the issue of debt relief will “remain ongoing.”
Tsipras’ government, initially elected in 2015 on promises to repeal all bailout-linked austerity, has instead approved more. The latest legislation extends budget cuts for roughly five years, beyond the end of Greece’s third bailout program in 2018.