Simon Harris plays down idea of new Irish push for debt relief

It ‘simply does not make sense’ to link Ireland to Greek campaign for further relief, says Minister of State

Simon Harris said ‘an awful lot has changed’ since Ireland secured a commitment from EU leaders to revisit the question of recompensing Ireland for its bank rescue.  Photograph: Eric Luke / The Irish Times

Simon Harris said ‘an awful lot has changed’ since Ireland secured a commitment from EU leaders to revisit the question of recompensing Ireland for its bank rescue. Photograph: Eric Luke / The Irish Times

 

Minister of State Simon Harris has played down any expectation that the government will seek further debt relief from its international creditors, claiming that Ireland is not comparable to Greece.

“To try and link the fastest growing economy in Europe with an economy like Greece that is still in very deep and dark difficulties simply doesn’t make sense,” he said, noting that “an awful lot has changed” since 2012 when Ireland secured a commitment from EU leaders to revisit the question of recompensing Ireland for its bank rescue.

Mr Harris was speaking in Brussels on the fringes of Thursday’s eurogroup meeting of finance ministers which was dominated by Greece, as negotiations intensify ahead of the first review under the third Greek bailout.

The Greek government has mounted a renewed call for debt relief over the last few weeks, with finance minister Euclid Tsakalotos visiting a number of national capitals to press the need for debt relief.

Mr Harris said that while Ireland would support debt re-profiling for Greece, a nominal debt write-down was not on the cards.

Nominal write-down

“There is no appetite for nominal debt write-down. That has been a consistent position right across a variety of member states, the overwhelming majority of member states, but in terms of debt reprofiling...the first and most important thing is the first review of the bailout programme,” he said.

Bailout monitors are due to return to Athens next week for the first review under the third Greek bailout programme agreed last summer.

But speaking at the close of Thursday’s eurogroup meeting, ESM managing director Klaus Regling warned that Greece faced liquidity issues if the review was not completed swiftly.

“It is urgent that the review is completed, to improve confidence, also because the liquidity situation will become tight over the next few months,” he said, noting that Greece faces debt repayments of €4 billion over the first quarter.

Eurogroup head Jeroen Dijsselbloem said Greece was “now entering a new phase of the programme.”

Pension reform

Among the main issues facing the Greek government as it renews negotiations is pension reform. The Greek government submitted its initial proposal to creditors last week, including a proposal to increase employer contributions and merge the State’s different pension funds into a single fund. A parliamentary vote is due later this month.

EU economics commissioner Pierre Moscovici said that while initial proposals on pension reform submitted by Greek authorities were positive, further detail, particularly on budget data, was needed.

“Pension reform is going to be at the heart of this over the next few weeks. It is not the only issue, but it is the most important. We are only at the beginning of the discussions about that,” he said.

Regarding the IMF’s continuing involvement in the Greek programme, Mr Dijsselbloem said the Washington-based fund had indicated its willingness to participate in the programme - a key demand of Germany and other countries - provided certain conditions were met, including clarity on fiscal targets, and debt sustainability analyses.

“Their intention is they want to be part of the programme.”

He added that Greek finance minister Euclid Tsakalotos had assured ministers that Athens supported the involvement of the IMF during Thursday’s meeting.

“There is an agreement. Part of that agreement is that the IMF stays on board. That is acknowledged and respected by the Greek government. I asked if that was still the case, and yes, that is still the case.”

Greek Prime Minister Alexis Tsipras has previously criticised the role of the IMF in the Greek bailout, accusing the fund of making unrealistic demands.