According to an interview with French newspaper “Le Figaro” with Eurogroup president Jeroen Dijsselbloem, the Eurozone will decide on further assistance to Greece in spring 2014, before the recovery program technically ends.
Mr. Dijsselbloem explained that the recovery program is starting to work and that the Eurogroup expects to approve the third loan installment. The Greek bail out program technically ends in 2014, after which point the country – in theory – will not be supported financially by the EU and IMF. While Greece will be able to borrow money from the markets, the huge debts and interest rates make that an unlikely scenario.
Mr. Dijsselbloem rejected the possibility of a new reduction of the Greek debt as “deceptively attractive”, as it will have a negative impact on the country’s credibility. Potential investors will be hesitant to invest, while the lenders will want to see of their returns.
The Eurogroup president also noted that in about a year the European Stability Mechanism (ESM) will be able to directly support ailing banks, however he rejected the possibility of “retroactive” refinancing, as there was no political support.
