European Interest

Juncker urges eurozone to honour Greek debt relief pledge

Flickr/European Council/CC BY-NC-ND 2.0
Alexis Tsipras, PM of Greece in a meeting with the President of the EC Jean-Claude Juncker at the European Council.

European Commission President Jean-Claude Juncker has called on the Eurozone member to honour their pledge to provide Greece with debt relief.

“We should now focus on the problem of reducing [Greece’s] debt. I want all member states to honour [their] pledges,” Juncker said during a visit to Athens on April 26.

As reported by the Agence France-Presse (AFP), bailout loans provided by the eurozone states and International Monetary Fund (IMF) prevented Greece from crashing out of the single currency. However they resulted in the country’s debt remaining at an unsustainable 180% of its annual economic output.

As Greece approaches the end of its final bailout programme in August, markets will need to be convinced that it can handle its debt load. If investors refuse to lend to the country at affordable rates it will be forced to seek help once again.

German business daily Handelsblatt reported that Berlin wants to set strict conditions for any further debt relief, even though Athens has repeatedly exceeded budget goals set by its lenders.

Juncker also insisted on April 26 that Greece’s bailout exit can be carried out without a precautionary credit line.

“There will be no precautionary line because we want to do everything to make Greece’s exit from the programme as clear and clean as possible,” he said.

In a separate report, the Reuters news agency quoted Juncker after his meeting with Greek Prime Minister Alexis Tsipras. “We want to apply every effort to ensure that the exit of Greece from the bailout is a clean one. And that there will not be any precautionary line,” he said. “I have never been a fan of austerity.”

Addressing reporters together with Juncker, Tsipras said Greece is on track to meet its fiscal targets for 2018-20 after overshooting them in recent years. He also said Athens and its EU lenders are also close to agreeing on a framework to reduce the country’s huge debt pile.

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