European Commission prresident Jean-Claude Juncker has urged euro zone countries to draw up more debt relief measures for Greece next month, saying Athens needed help after making “huge progress” in its economic reforms.
Euro zone finance ministers will meet in Brussels on May 22 to discuss progress made in talks to conclude Greece’s crucial bailout review which has been delayed for months.
“The debt relief measures, reasonable ones I mean, are heavily needed,” Juncker said in an interview with Greek news website euro2day published on Wednesday. “In May they (the ministers) have … to give a design of future possible debt relief measures.”
The comments will be welcomed in Athens where the government argues debt relief is badly needed after seven years of austerity measures imposed by creditors.
Talks with lenders to date have been held up by differences over the roll-out of those measures, including reforms in the energy and labour market and pension cuts and income tax increases.
Juncker suggested it was time to give Greece some slack rather than enforce more cuts.
“We have to acknowledge that Greece is making a huge progress and insisting on further major cuts in the pension area would be bad advice,” Juncker said in the interview.
Greece attained a 4.2 per cent of GDP primary budget surplus last year – excluding debt servicing costs – significantly above the target set in its bailout.
But the IMF has not yet decided whether to finance the bailout, the country’s third since 2010, and wants assurances from euro zone governments that Greek debt be made sustainable before it joins the programme.