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No EU ‘debt forgiveness’ for Greece: Portuguese PM

Published on 11/07/2015

Portugese Prime Minister Pedro Passos Coelho

“A very broad consensus exists in Europe that refuses debt forgiveness be put on the table. This was very clearly stated during the last eurozone summit,” the centre-left premier said.

He was speaking as Eurogroup finance ministers prepared to meet in Brussels to vet Greece’s last-ditch reform proposals, which seek a new bailout to help keep the country in the euro.

“I don’t think it would be easy for any head of state in Europe to tell their nation that they’re going to forgive billions of euros that the country itself needs,” Coelho said during a visit to central Portugal.

He added other ways of helping Greece deal with its crushing 320-billion-euro ($357 billion) debt load were under consideration.

“We are all prepared to find a reimbursement profile for this debt and its interest that can help Greece out of the difficult situation it finds itself in,” he said, referring to methods to reconfigure the terms and duration of repayment, but not reduce the principal which is due.

If eurozone finance ministers approve Greece’s new reform proposals — which include hikes in VAT, cuts in pensions and sales of state assets — it is hoped an agreement on the bailout will be concluded by EU leaders meeting Sunday.

But the issue of debt forgiveness has emerged as a key point of disagreement in any deal.

Germany leads a group of EU nations rejecting the idea of a “haircut,’ or reduction in the total owed.

In May 2014, Portugal concluded a bailout plan for its financially-swamped economy by committing to dire austerity and reform in exchange for 78 billion euros in loans.