Eurogroup ‘ready to work with’ new Greek government

Eurogroup president Jeroen Dijsselbloem says there is little support for debt write-off

Jeroen Dijsselbloem has said the question of extending the Greek bailout would be under consideration at today’s euro group meeting, which will be attended by Irish finance minister Michael Noonan and his 18 euro zone counterparts.  Photograph: Kiyoshi Ota/Bloomberg.

Jeroen Dijsselbloem has said the question of extending the Greek bailout would be under consideration at today’s euro group meeting, which will be attended by Irish finance minister Michael Noonan and his 18 euro zone counterparts. Photograph: Kiyoshi Ota/Bloomberg.

 

The eurogroup is willing to work with the new Greek government, but there is little support for any writedown in the nominal value of debt, the head of the eurogroup has said.

Arriving in Brussels for this afternoon’s meeting of euro zone finance ministers, Jeroen Dijsselbloem said he wanted to congratulate the new Greek government on their success in the elections.

“The eurogroup stands ready to work with [the new government] as we’ve always worked with the Greek government,” he said. “We will open the talks with them as soon as they’re up and running.”

While he said it was “too early” to comment on whether there would be any moves around debt sustainability, he appeared to rule out any major concessions on the Greek debt burden. “Writing off debt in nominal value, I don’t think there is a lot of support for that.”

Noting that membership of the euro zone “means that you comply with all that we’ve agreed with each other,” he said that euro zone lenders had already made a number of concessions to Greece.

“We’ve already done a lot to lift the debt burden for Greece in terms of interest rates and the maturities. We’ve always said that we’ll continue to work with them.”

While an extension of the maturities of Greek loans is expected to be considered by euro zone finance ministers, any major restructuring of Greek debt is considered unlikely.

Mr Dijsselbloem said the question of extending the Greek bailout, which was extended by two months in December, would be under consideration at today’s euro group meeting, which will be attended by Irish finance minister Michael Noonan and his 18 euro zone counterparts.

Greece has been struggling with the implementation of the terms demanded by the fifth and final review of the second Greek bailout, with a final € 1.8 billion still due to Greece under the programme.

German finance minister Wolfgang Schauble, ESM chief Klaus Regling and European economics commissioner Pierre Moscovici are among those attending this afternoon’s meeting.

The scheduled meeting is the first euro group of 2015 and the first since December’s meeting at which finance ministers agreed to extend the EU portion of the Greek bailout until February. Greece has received two bailouts from the EU and IMF since it became the first euro zone country to move perilously close to default in 2010 during the euro zone sovereign debt crisis.

Meanwhile the euro rebounded from an 11-year low overnight following the outcome of the Greek election which saw radical left party Syriza top the poll.

EU figures responded to the victory of Syriza overnight. In a statement yesterday evening, the head of the centre-left Socialist and Democrats (S&D) group in the European Parliament welcomed the expected victory of Syriza and urged Alexis Tsipras to form a strong “pro-European coalition.”

“The renegotiation of the Greek’s debt, and in particular the extension of the terms of its bailout, should no more be considered as a taboo,” said Gianni Pittella, the Italian socialist MEP who leads the second -largest group in the European Parliament.

“The will of the Greek people should be respected by all EU institutions and member states alike.” The leader of Alde, the liberal group in the European Parliament, said the strong performance of To Potami “proves there is an appetite for a pro-European,pro-reform force in Greek politics.”

“I hope To Potami will now play a key role in any coalition Government,” said Guy Verhofstadt.

The European Central Bank, European economics Commissioner Pierre Moscovici, and Klaus Regling, the head of the ESM rescue fund, the will be represented at today’s euro group meeting in Brussels.