The European Stability Mechanism (ESM) and France have submitted plans for “further debt relief, which will be linked to the economic development of Greece up until 2050”, according to a report by the German financial daily Handelsblatt.
The proposals submitted by the ESM and France include extending the maturity of loans, setting a maximum interest rate, and debt relief linked to economic growth, according to a 27 February ESM working paper obtained by Handelsblatt.
According to the proposals, Greece’s debt servicing will be suspended if the five-year growth average falls below 2.8 percent.
A partial servicing of the debt would be necessary if growth is between 2.8 percent and 3.4 percent, while regular, full repayment would be necessary if growth is over 3.4 percent.
When the Greek government over the last years was seeking debt relief, former German finance minister Wolfgang Schaeuble reacted stubbornly, declaring that Athens must implement its reforms, Handelsblatt reports, noting that Athens can hope that this stance in Berlin will end.
At the end of April, at an informal foreign ministers’ meeting in Sofia, Bulgaria, the issue of debt relief for Greece will be discussed.
The report suggests that German Finance Minister Olaf Scholz will have to be more willing to strike a compromise than his predecessor, as both EU politicians and Brussels’ negotiators expect that.