With a Greek crisis threatening the European Union once again France’s government is sending Bruno Le Maire, the finance minister, to Athens today to try to broker a breakthrough in stalled bailout negotiations and contentious debt talks.
Mr Le Maire’s visit comes before a meeting on Thursday of eurozone finance ministers as the International Monetary Fund continues to show unwillingness to fund endless bailouts for the eurozone’s most troubled economy, passing more of the burden on to the EU and Germany, its top paymaster.
The proposal reportedly makes future debt relief dependent on Greece’s GDP growth, so that Greece can secure more generous debt restructuring if the GDP growth trajectory is subdued. On the other hand, if the macroeconomic path proves more solid, grace periods and maturity extensions will be less extensive. On its part, the Greek side is pushing for the elimination of the phrase “if needed” from the formal Eurogroup statement regarding debt relief, so as to facilitate the inclusion of GGBs in the ECB QE program.
Berlin is holding national elections later this year and is rejecting talk of any more debt relief for Greece, insisting that the IMF helps to fund the €86 billion Greek bailout despite strong reservations about the country’s unsustainable debt.
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