Grexit: Europe tells Greece there will be no discussion about writing off any of its bailout debt

 
Jake Cordell
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Greece and its creditors have been locked in negotiations about the next stage of its bailout
Greece and its creditors have been locked in negotiations about the next stage of its bailout (Source: Getty)

The European Commission has told Greece it is not considering writing off any of the €86bn (£67.5bn) handed over during the Greek bailout crisis, as it aims to have a new package of reforms wrapped up within the next week.

Finance chiefs from Eurozone countries gathered in Amsterdam this morning to discuss the latest progress on the Greek bailout, with continued speculation that Greece's future in the Eurozone is not yet secure.

Jeroen Dijsselbloem, president of the Eurogroup of finance ministers, said "substantial progress had been made" in addressing the outstanding issues between Greece and its creditors.

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"Co-operation between the institutions and Greek authorities has been strong and productive. [We are] close to an agreement on a number of key areas - pension reform, income tax reform and on non-performing loans," he said.

However, "there is no support in the Eurogroup for nominal haircuts on the debt," Dijsselbloem confirmed. He said that the Eurozone was willing to look at debt sustainability in terms of extending loans or offering grace periods, but it would not be considering write-downs.

Christine Lagarde, the head of the International Monetary Fund (IMF), agreed with Dijsselbloem's assessment: "I believe that no haircut is needed. The nominal value of the debt does not have to be changed," she said, despite reports that the IMF wants the Eurozone to be more forgiving with Greece's outstanding liabilities.

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If Greece and its creditors - the troika of Eurozone, the European Central Bank (ECB) and the International Monetary Fund (IMF) - can negotiate a new deal over the weekend then Dijsselbloem said it to be signed by finance ministers next Thursday.

The troika is insisting that Greece agrees to implement spending cuts or tax rises worth three per cent of its GDP and sets up a "contingency package" of reforms worth a further two per cent. These reforms would be outlined in advance, but not triggered unless Greece falls significantly behind on its commitment to run a budget surplus.

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