Following a two-day meeting of eurozone finance ministers in Amsterdam, German Finance Minister Wolfgang Schäuble said Greece won’t necessarily require an easing of its debt burden. Schäuble said this would apply if the International Monetary Fund and the Germany-led consortium of lenders determine that the country’s debt sustainability is ensured, Bloomberg reported Saturday.
A country’s debt sustainability is defined as its ability to fulfill its loan payments without accumulating additional debts or arrears. Germany and several other countries have opposed partially forgiving Greece’s loans, contrary to IMF’s stand that without debt relief, Greece’s debt will not be sustainable.
“The debt sustainability analysis determines whether measures are needed” to help the cash-strapped country, Schäuble reportedly said after meeting other finance ministers. “It is my conviction that this is not necessary for the coming years.”
Negotiators from Greece, the European Union and the IMF are yet to agree on further reforms that will keep aid flowing to Greece from its third bailout, worth 86 billion euros ($97 billion). However, a final deal to unlock badly needed bailout funds remains elusive, as the parties argue over what more Athens needs to do to balance its budget. The bailout review was initially supposed to be completed in October.
Greece tabled a bill to its parliament Friday evening, overhauling its pension system and raising income taxes on middle and high earners. The bill is part of a $6.1 billion cost cuts program required by Greece’s creditors for the conclusion of the bailout review.
Greece’s public deficit for 2015 stood at 7.2 percent of its gross domestic product, up from 3.6 percent a year ago, but lower than the 7.6 percent predicted by European officials in February. The country also posted a primary surplus of 0.7 percent, better than the 0.25 percent stipulated in its creditor agreement signed last year.
Earlier this week, Greek Prime Minister Alexis Tsipras made an appeal for debt relief instead of further austerity measures, after fresh data showed the economy had a better-than-expected primary surplus in 2015.