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Don’t pin hopes on debt reduction: EU to Greece

Friday, 30 January 2015 6:25 AM [ Last Update: Friday, 30 January 2015 6:25 AM ]

European Commission President Jean-Claude Juncker arrives at the European Council in Brussels, on January 26, 2015. (AFP photo)

The European Union has reaffirmed the need for the new anti-austerity government in Greece to abide by its commitments to the international creditors, saying the eurozone states do not support a reduction in Athens’ massive debts.

In an interview with German television ARD on Thursday, European Commission Chief Jean-Claude Juncker said a reduction of Greece’s bailout debts “is not on the radar.”

“I don’t think there’s a majority in the Eurogroup... for a reduction of the debt,” added the senior EU official.

A member of the eurozone block, Greece has accumulated about 315-billion-euro debt in exchange for a colossal 240-billion-euro (USD 269 billion) bailout granted by the so-called troika of international lenders, including the European Central Bank, the European Commission and the International Monetary Fund.

Meanwhile, German Vice Chancellor Sigmar Gabriel has also reiterated its call for Greece to “stick to its commitments” under its bailout agreement with the troika.

He was specifically critical of the new Greek administration’s decision to scrap the privatization of major ports and power companies.

The warnings come ahead of a Friday meeting between Greece’s newly elected Prime Minister Alexis Tsipras and Jeroen Dijsselbloem, the current head of the eurozone group of finance ministers. The talks are deemed to kick off Greece’s stride for adjusting the terms of its bailout deal.

Greece’s radical leftist party, Syriza, which stormed to victory in the country’s general election on January 26, has said it will start a renegotiation of the loans Athens has received in return for the enforcement of harsh austerity measures.

The party believes it would be unrealistic to expect the country to repay its huge debt in full.

European leaders are afraid that Greece could be forced to exit the eurozone in case it fails to repay its debt.

HJM/MKA

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