Sven Giegold

Greece: Eurogroup should follow IMF’s call on debt relief

Negotiations between the finance ministers of the Euro Area (Eurogroup) and the International Monetary Fund (IMF) on whether and under which conditions the IMF could contribute to the current Greek programme were not concluded on Monday. Despite the fact that the Eurogroup had agreed on a set of measures to help alleviate the Greek debt burden in the short term, IMF representatives and the Eurogroup could not reach agreement to get the fund on board with regard to the current Greek programme. The IMF has repeatedly pointed out that based on strict conditions and reform requirements, a substantial reduction of the current primary budgetary surplus target of 3.5% combined with debt relief measures, would be necessary to make the Fund join the programme. However, on Monday, the Eurogroup maintained its demand of the 3.5% surplus target which contributed to the break up of the talks. This has triggered demands from leading members of the German Christian Democrats to end the support programme for Greece.

MEP Sven Giegold and MEP Ernest Urtasun, financial and economic policy spokespersons of the Greens/EFA group, commented:

“The IMF is right on fiscal targets and debt relief. It is counterproductive to force Greece into a 3.5% primary surplus until 2020. The risk of medium-term overindebtedness is a killer for investment and may not be ignored but must be answered with effective debt relief. Who wants to keep the IMF in the programme has to deliver on debt relief now. The cosmetic short-term measures as agreed by the Eurogroup do not suffice.

The desperately needed rapid reduction of unemployment and poverty cannot succeed, if the Greek government must pursue overambitious debt reduction targets which are even criticised by the IMF. This has to go hand in hand with effective and fair reforms in Greece targeting a modernisation of the state to overcome clientelism and tax fraud.

The demand of members of the German Christian Democrats that Germany should exit the Greek programme, if the IMF does not come on board is blind to the needs of such a cooperation and destructive. With its strong opposition to any conditional substantial debt relief, the German conservatives demonstrate a ‚let me have my cake and eat it too‘ reaction, which does not contribute to finding  a sustainable way out of Greek crisis.”

Rubrik: Wirtschaft & Währung

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