European rescue fund chief rules out more Greek debt writedown

Tuesday 07 January 2014 12.18
Klaus Regling rules out more debt haircuts for Greece
Klaus Regling rules out more debt haircuts for Greece

The head of the euro zone aid programme for crisis-hit members has ruled out a further debt writedown for Greece in an interview with a German online news magazine.

"There will not be a debt haircut," Klaus Regling, head of the European Stability Mechanism (ESM), the fund set up to help euro zone countries at the height of the financial and debt crisis, told Spiegel Online.

His comments follow a call by Greek Foreign Minister Evangelos Venizelos for an easing of repayment conditions in a German newspaper at the weekend.

Mr Regling said that the ESM was Greece's biggest creditor. "Its loan terms are at 30 years, the interest rate slightly over 1.5%. For the coming 10 years the interest was deferred. All that corresponds, economically, to a debt haircut," he said.

Mr Regling added that the room for manoeuvre for a further easing of terms by creditors was narrow. "The IMF is basically not changing its conditions," he said.

But he added that there could possibly be some small leeway on Greece's bilateral loans from its first aid package, although that would have to be decided by the individual states who had provided the credit.

Greece was first bailed out by the European Union, the IMF and the European Central Bank for €110 billion in 2010.
When that failed, veering Greece dangerously close to exiting the euro zone, the country got a second rescue in 2012 worth €130 billion plus a private sector debt write-off totalling over €100 billion.