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Read our synthesis : Greece: historic victory of the radical left
This is one of the” big “topics that will be at the coming weeks menu for the new Greek government. And its creditors, the “troika”, that is to say, the International Monetary Fund (IMF), the European Commission and the European Central Bank (ECB).
As soon known the result that the gave winner Alexis Tsipras, the leader of Syriza, intends to “collaborate and negotiate” with the country’s creditors a “new viable, sustainable solution that benefits all” . He said be prepared to submit “a national plan and a plan on debt” .
- What is the extent of the Greek debt and holds it?
Despite its restructuring in 2012, the Greek government debt now exceeds 175% of gross domestic product (GDP) and is too heavy a handicap growth.
321.7 billion euros of Greek debt held 70.5% by international official creditors.
The IMF lent 32 billion of euros, the other countries of the euro area 53 billion through bilateral loans, while the European Financial Stability Facility (EFSF) has granted 141.8 billion.
- A reduction Is Greek debt possible?
From Monday 26 January, the ECB has set the tone. In an interview published by the German newspaper Handelsblatt, Benoît Coeuré board member of the monetary institution, said it will not participate in any reduction of the Greek debt.
“It is not up to the ECB to decide if Greece needs a debt relief. But it is absolutely clear that we can not agree with the reduction of debt, which includes Greek bonds held by the ECB “, he said, adding that this impossibility due to legal reasons.
“The ” Troika “ itself knows that Athens will struggle to get by if we did spandrel no one way or another, “, however, says Jesus Castillo, an economic analyst at Natixis.
This relief could take two forms. The first and most likely, would not touch the total amount of the debt, but to extend the maturity of loans and reduce interest rates, which will ease the annual repayments. “The burden would be more bearable, but it may not be enough,” Judge Eric Dor, an economist at IESEG.
The second option would be to literally erase part of the debt. Several methods are possible, but all would be politically explosive.
“In the aftermath, Portugal and Ireland, whose debts exceed 120% of GDP, could legitimately claim as an erase , blows a MEP. not. “
Read the reactions After the victory of SYRIZA, Europe divided between joy and fear
- And if negotiations failed?
The scenario is unlikely, but not zero. Greece could then choose to default on its debt (do not pay)
“The euro area could lose 256.4 billion euros maximum,” calculates M . Dor. The EFSF losses would indeed offset by the Member States
Read our decryption . Does risk Greece again out of the eurozone?
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