World / Europe

Greeks seek debt relief as EU steps up warnings

(Agencies) Updated: 2015-06-14 19:51

BRUSSELS/ATHENS - Greek negotiators were expected to press the country's international creditors for debt relief on Sunday as Europe stepped up pressure on Athens to offer major concessions on austerity and reform or face dire consequences.

Neither side doubts the urgency of reaching a deal as Greece must repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund by the end of this month or default, putting its future in the euro in grave danger.

Germany's Frankfurt Allgemeine Sonntagszeitung reported that European Commission President Jean-Claude Juncker had warned Prime Minister Alexis Tsipras about the risk of "Grexit" - a Greek exit from the currency bloc - when they met in Brussels last week.

Giving instructions to his negotiating team before it headed to Brussels, Prime Minister Alexis Tsipras has said he may accept bitter compromises on the creditors' demands, but signalled he wants a significant easing of Greece's huge debt burden in return.

A person familiar with the long-running negotiations between Athens and its creditors told Reuters that discussions were under way on the debt relief issue. He declined to say who was involved but acknowledged that Greece could not take on yet more debt without some kind of relief.

Athens faces immediate problems in repaying debts over the summer with money it does not have, as the European Union and IMF have not paid any money from Greece's 240 billion euro bailout programmes since the middle of last year. On top of the IMF loan, it must also repay 6.7 billion euros when Greek bonds held by the European Central Bank fall due in July and August.

Even if this short-term hump can be overcome, Greece still faces the daunting prospect of eventually repaying the bailout loans, something that will hang over its enfeebled economy for decades unless a relief deal is achieved.

The Greek team, led by a deputy prime minister, Yannis Dragasakis, and chief negotiator Euclid Tsakalotos, is likely to take this up in a second day of talks on a Greek counter-proposal with EU officials in Brussels on Sunday.

"The ongoing talks are difficult. Positions are still far apart. It is not certain whether there will be an outcome. Senior Commission officials are worried whether an agreement can be reached on time," an EU official said.

Greece already gained significant relief when a large part of its debt held by private investors was written off in 2012. But any deal that involves writing off public debt is likely to provoke outrage among European taxpayers, who funded the bulk of the bailout loans.

That resistance is strongest in Germany, the biggest contributor to the two bailout programmes since 2010, when Greece was forced out of international debt markets and slid deeper into a depression made yet worse by austerity policies imposed at the creditors' behest.

Previous Page 1 2 Next Page

Trudeau visits Sina Weibo
May gets little gasp as EU extends deadline for sufficient progress in Brexit talks
Ethiopian FM urges strengthened Ethiopia-China ties
Yemen's ex-president Saleh, relatives killed by Houthis
Most Popular
Hot Topics