Thursday, December 10, 2015

Eurozone Fund Weighs Greece Debt-Relief Options

by Viktoria Dendrinou

Wall Street Journal

December 10, 2015

A deal to reduce Greece’s debt burden could include capping interest payments, extending debt maturities and linking debt repayments to economic growth, according to a paper drawn up by the eurozone’s bailout fund.

The nine-page document, dated Aug. 10 and seen by The Wall Street Journal, was put together by the European Stability Mechanism, the Luxembourg-based eurozone bailout fund, and outlines different options to reduce Greece’s large debt load.

The paper focuses on three measures: extending the maturity of some of Greece’s loans, linking fixed debt repayments to the country’s gross domestic product and capping or deferring interest payments.

“These measures provide the necessary conditions for bringing debt service back to a sustainable path,” it says

The document doesn’t examine cutting the face value of the debt, an option ruled out by eurozone leaders in July.


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