Cyprus Mail

Bank recap and debt relief top priority, says Greek finance minister (Updated)

Capital controls in the banks of Greece

Greece’s top priorities in the immediate term are shoring up capital levels in the country’s banks and launching discussions with lenders on debt relief, Finance Minister Euclid Tsakalotos said on Wednesday.

“Our priority is the recapitalisation of the banks so there will be stability in the economy, and secondly concluding the assessment (with lenders) and starting discussions over debt,” Tsakalotos told reporters.

They were his first public comments since he was reappointed finance minister by Prime Minister Alexis Tsipras in a new government sworn in on Wednesday morning.

The first review of Greece’s 86 billion euro bailout programme starts next month.

“Our priority is to negotiate the debt issue, immediately after the review is concluded,” added George Chouliarakis, the deputy finance minister.

Greece’s leftist government says the economy cannot recover from one of the worst depressions to hit an industrialised country in modern times unless the burden of servicing its debt is eased.

Some European governments, particularly Germany, are opposed to writing off part of Greece’s debt but less averse to stretching out its repayment schedule.

Euro zone officials told Reuters last week that governments were ready to cap Greece’s annual debt-servicing costs at 15 per cent of its economic output over the long term, so that nominal payments would be lower if the Greek economy struggles.

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