Schauble backs bondholders as Troika reports

THE TRIO of Greece’s international lenders, known as the Troika, published their third review of the country’s ongoing bailout yesterday.

German finance minister Wolfgang Schauble told media in his home country that the Greek government must fulfil its obligations, and that bondholders would not undergo further haircuts.

The Troika, which is made up of the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission, expect that the Greek economy will finally begin to grow in 2014.

The group was positive about the government’s structural reforms, commenting: “Greece continues to make overall, albeit often slow, progress”. The report adds: “The fiscal outlook for 2013-14 remains subject to high uncertainty”.

The lenders also expect unemployment to begin declining in 2014, with a minor fall from 27 to 26 per cent. By 2016, they expect the proportion of people out of work in the embattled Mediterranean economy to have fallen to 21 per cent.

The original forecasts at the time of Greece’s first bailout in 2010 were more optimistic, predicting that the country would return to economic growth by as early as 2012. Forecasts have been repeatedly pushed back.

The country is currently mired in its sixth year of recession, having lost around a fifth of its GDP since the beginning of the crisis in 2008.