Greece could get 11 years to repay its €110bn debts

THE EU and the IMF could extend the period in which Greece must repay its bailout loans by five years, to make it easier for it to service its debt, an IMF official has said.

“We have the possibility to extend the repayment period... from about six years to around 11,” Poul Thomsen, the IMF official in charge of the Greek bailout, said.

Greek, EU and IMF officials have repeatedly mooted the possibility of extending the period in which Greece must repay its €110bn (£93.43bn) bailout loans.

But the IMF official was more specific on how the repayment period could be stretched after Greece receives its last instalment in 2013.

Most critical are the first two years, when the bulk of the debt to the EU and IMF falls due. Under current repayment schedules, Greece’s gross borrowing needs will balloon above €70bn a year in 2014-15 from around €55bn a year in 2011-2013.

“(As things stand now) Greece must repay the bulk of its €110bn loans in the first two years after the programme expires,” Thomsen said.

“This (the extension) would give markets the signal: ‘Don’t worry about the repayment of the €110bn, this is not going to affect your claims'," he added.

Greece in May became the first Eurozone member to turn to its partners and to the IMF for help.