Wednesday, May 25, 2016

Euro group: debt relief and money for Greece – SPIEGEL ONLINE

It was almost like in summer 2015: Until two in the morning, the euro zone finance ministers negotiated in Tuesday night, then got the result. The crisis-ridden Greece to get new emergency loans – and possibly also the long-awaited debt relief

That by negotiating ministers in Brussels and not once were content with a mini-progress, shows the importance of all sides was a solution.. A new beginning of the summer drama of 2015, as a nighttime emergency summit chased the other, no one wanted. Not now, in the middle of the refugee crisis. Not before the G7 summit in Japan on Thursday. And certainly not in front of the British EU referendum on 23 June.

Perhaps helped this situation to the fact that all participants become more perceptive in the game was as a year ago:

  • The Greeks have recognized that they must provide before they can receive something and have pushed in recent months many reforms. The international donors has apparently convinced enter with several months delay for the next relief funds freely. Greece receives 10.3 billion euros ; the first tranche of 7.5 billion is already flowing in the second half of June.
  • The Euro group – and especially Germany – fits in principle the requirement of the International Monetary Fund (IMF) to debt relief for Greece. However, they should only be made in 2018 come, and many details are still open. The necessary approval of national parliaments, such as the Bundestag could be a problem.
  • IMF remains in Greece rescue on board , which particularly considers the federal government as indispensable. But the Monetary Fund had to make a compromise: He wanted the debt relief during the current third bailout package, even before 2018.

In the night of Wednesday it had long looked after as if it only would be an agreement in principle on additional funds from the current third rescue package for Greece. The central dispute between the IMF and other donors but threatened to remain unsolved. He was only on Monday again escalates when the IMF in a study not only once debt relief for Greece demanded, but also, they socialize at no reform conditions.

In the other donors, the European Commission and the European Central Bank (ECB), which caused a shake of the head. “This is our nobody understood,” said one of the bargaining parties. Schaeuble accused the IMF even ignorance ago: “Who asks for debt relief, shows that he does not really know what actually are the problems of Greece.”

ECB and the European Commission assess the prospects of the Greek economy wide positive than the IMF. They go about assuming that Greece until 2018 a primary surplus – may reach 3.5 percent and then hold – ie the budget without interest payments. The IMF considers the utopian and therefore requires a haircut. Already this year the Greek debt is expected to grow to 183 percent of economic output, allowed 60 percent. Left unchecked, it could according to the IMF in 2060 even 250 percent his.

During the night there had been “tense moments,” Greek Finance Euclid Tsakalotos said after the meeting. That nevertheless a compromise was found, is quite a surprise. It could be the beginning of the end of the ongoing crisis. It is now possible to break the vicious circle of shrinking economic and austerity measures and to ensure re-investment, said Tsakalotos emphasized optimistic. “This is an important moment for Greece, after all this time.”

debt relief have political impact

However, in the future some dangers, such as the implementation of Greek reforms. “Greece been adopted lots of legislative packages, but is not to” criticized the FDP MEP Michael Theurer. Nearly three-quarters of all adopted since the first utility measures were never implemented.

In addition, still have the parliaments of some euro countries, including Germany, give their blessing. In particular, the question of debt relief has enormous explosive force. In the Bundestag, numerous members of the Union have announced their opposition, why Schäuble wanted to avoid a vote in this legislative term

He has now done. About the debt relief is to be decided in 2018. 2017 is the next federal election. “2016 I Finance”, said Schäuble. The decisions in 2018 would have to meet those “which the German voters will transfer the legitimacy 2017″.

How that will go forth, is open. The biggest conflict is pushed

However, the Greek state bankruptcy for the time being averted, Athens gets a little room to breathe -.. And now has at least the prospect of long-term, perhaps to get back on their feet thanks to debt relief

in summary: the Euro finance ministers have made in the fight against the debt crisis in Greece in a unanimous decision. The next installment of the rescue package will be paid, also Athens is to receive debt relief – which the International Monetary Fund has called for long. However, should it be decided in 2018, and the reaction could be very difficult

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