Lenders press for Greece to be given new debt write-off

Report says taxpayers would bear brunt of  the measure without  funding from the ECB

Berlin

The Troika of lenders overseeing Athens’ progress in meeting its reform programme was today reported to be pressing for a new Greek debt write-off to help ease the country’s deepening financial crisis, despite stiff opposition from Germany.

Der Spiegel magazine said representatives of the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission had advocated a write-off at a meeting held last Thursday to prepare for the next EU finance ministers summit, which will focus on Greece.

The German news magazine said the Troika plan did not envisage ECB help in funding a new Greek debt write-off, so taxpayers would bear the brunt of the measure if it were implemented. It said the ECB, which is holding about €40bn (£32bn) worth of Greek loans, could not join in any debt write-off for Athens because the bank was prohibited from undertaking this form of state financing. Greece was granted a partial financial sector- funded debt write-off last year.

Athens is widely reported to need up to €30bn to close a gap in the current EU funding plan.

The report implied that the Troika was becoming increasingly frustrated with Greece over its efforts to meet its reform deadline, and was said to have attached 150 new conditions to its debt write-off proposal, including measures that would make it easier to sack Greek workers, reduce minimum wage levels and lift privileges attached to certain professions.

The Troika is due to deliver its closing report on Greece’s reform progress by 12 November at the latest. An interim report has said that Athens has so far managed to implement 60 per cent of the reforms needed to qualify for its next tranche of €31.5bn bailout funding. A further 20 per cent are said to be under consideration with a further 20 per cent being unmet.

A new Greek debt write-off was proposed last month by the IMF’s director, Christine LaGarde. However the idea is strongly contested by Chancellor Angela Merkel’s government because of the impact it would have on German taxpayers, most of whom oppose more bailout money for Greece. Germany faces a general election next year.

The Troika proposal, although not publicly acknowledged, was dismissed by Ms Merkel’s finance minister, Wolfgang Schäuble, in an interview with German radio yesterday. Mr Schäuble stressed that under German budgetary law it was illegal to provide additional funding to a debtor country like Greece that had not met its financial commitments. “This is a discussion which has little in common with reality in eurozone member states,” he said.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own