Monday, 26 December 2016

Greece's Debt Relief Is Back After It Being Frozen By Worried Creditors


Measures to ease Greece's debt obligations will resume after being frozen earlier in the month over Athens' decision to pay a year-end bonus to pensioners.

President of the Eurogroup Jeroen Dijsselbloem said the country's creditors had agreed to go ahead with planned short-term debt relief measures. It came after he received a letter from the Greek finance minister, Euclid Tsakalotos, in which he said Greece would honour its bailout commitments.

The relief were called off last week by the euro zone bailout fund European Stability Mechanism after the Greek government said it would pay a Christmas bonus to some pensioners and keep lower value added tax on some islands.

The Greek prime minister Alexis Tsipras announced that his government would provide a special one-off benefit payment to pensioners earning below €800. The new spending measure, which was made without consulting his euro zone lenders, will set the Greek Treasury back €617m.

The measures worried the country's creditors, who have set targets for Greece to reach a primary budget surplus of 3.5pc in 2018. The lenders decided to suspend a short-term debt relief deal for Athens. This would reduce its debt by 20pc of GDP by 2060.

Mr Dijsselbloem said: "I'm happy to conclude that we have cleared the way ... to go ahead with the decision-making procedures for the short term debt measures, which will be conducted in January."



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