The European Commission’s vice-president and financial stability commissioner, Valdis Dombrovskis, outlined various prospective debt relief measures for Greece, including linking debt servicing to growth rates, in an interview with the German financial daily Handelsblatt.
“Greece will pay more if the economy is developing well, and less if it is stagnant or in recession. Naturally, one is discussing how to link such a mechanism to compliance with fiscal targets,” Dombrovskis said, regarding the so-called French debt relief model.
He clarified that these proposals regard the 135bn euros from loans issued by the European Financial Stability Facility (EFSF), which were paid out during Greece’s second bailout programme.
He noted that the 45.9bn euros in loans borrowed in the third bailout programme already have very low interest rates and long maturity periods.
“There are also the profits of the ECB and national central banks, which can be returned to Greece,” he said.
Though he does not appear optimistic about IMF participation in the Greek programme, he appears certain that Greece will exit the current bailout programme on schedule, on 20 August.
“Most likely, yes. We are working in that direction and overall the programme is on course. Greece has exceeded fiscal targets. This year the target of a 3.5 percent primary surplus will certainly be met. Everyone involved is decisive about completing the programme on schedule,” Dombrovskis said`