The head of the European Stability Mechanism Klaus Regling has categorically ruled out the possibility of a debt reduction for Greece, arguing that if necessary, then loan maturities will be extended in 2018.

In his interview to Austrian newspaper Der Standard, the ESM chief explained that a debt sustainability analysis will be carried out at the end of the bailout program in 2018 and, if necessary, action will be taken. Mr. Regling however ruled out the possibility of a debt reduction, something not even Greece wants. “The goal will be to improve the loan conditions once again, for example, the loan maturities” he explained.

Regarding the implementation of the Greek program, Mr. Regling commented that it is “slow and often with delays”. He then stressed that “if Greece implements the reforms with determination, the country has a good chance to get out of the crisis. There already is a primary surplus in the budget. Competitiveness has been restored to a large degree thanks to internal devaluation with lower wages and pensions. But this process does not stop, more reforms of the labor market and privatizations are necessary. At the moment, growth and budgetary developments are better than we imagined and that is very good”.