Greece: a debt forgiveness would cost 47.8 billion to France – Le Figaro

Greece: a debt forgiveness would cost 47.8 billion to France – Le Figaro

The leader of the radical leftist Alexis Tsipras calls for a unilateral restructuring of Greek debt, which could lead to non-repayment of all or part of the principal.

What would it cost to France and Germany deletion of Greek debt? The issue was revived from Alexis Tsipras, leader of the far-left Syriza party, leading in polls, claims a unilateral debt restructuring that could lead to non-repayment of all or part of the principal – a “haircut “. Greek public debt now stands at 320 billion euros, or 177% of GDP. It is primarily owned by the governments of the euro area, the IMF and the ECB, which makes its more difficult restructuring, as it will be at the expense of the European taxpayer. Questions about repayment, after the election of January 25, drove up borrowing rates in the country beyond 10%, the highest level since July 2013.

Once owned by the sector private Greek debt is now at 85% by the Member States in the area, through the European Financial Stability Facility (EFSF), bilateral government loans, the International Monetary Fund (IMF), which participated in both bailouts of Greece, the European Central Bank (ECB) and the national central banks, which hold 8% of the Greek debt.

If Greece unilaterally renounced to repay its debt, which would place the de facto situation of default – and accelerate its exit from the euro zone, the famous “Grexit” – this would result in a net loss to the Member States of the euro area

In case of restructuring. The IMF and the ECB would be reimbursed as a priority, because they have the status of “preferential creditors”. Remain bilateral loans (52 billion euros) and loans through the EFSF, or 141.8 billion euros for Greece since 2010. France guarantees 21.8% of loans granted through the EFSF or EUR 31 billion, excluding bilateral loans of 16.8 billion euros. A total slate 47.8 billion for France, which would be 735 euros per French. For Germany, the bill would be $ 63.6 billion. These represent future revenues less for States. This explains the tensions of governments when they hear again talk of “Grexit” or “haircut”.