Scicluna, ‘reasonable concessions’ possible for Greece, Eurogroup promises ‘pragmatic approach’

Eurogroup president Jeroen Dijsselbloem: Greece must “stick to the rules” • EFSF chief executive Klaus Regling: Greece has already been given savings on its debt

Edward Scicluna (left) with Dutch finance minister and Eurogroup president Jeroen Dijsselbloem
Edward Scicluna (left) with Dutch finance minister and Eurogroup president Jeroen Dijsselbloem

Malta will engage with the Greek government inside the Eurogroup, finance minister Edward Scicluna said today, hinting at “reasonable concessions” for the debt-stricken nation as it elected radical leftist leader Alexis Tsipras to power on Monday.

Tsipras has vowed to renegotiate terms of the €240 billion bailout for Greece, whose austerity conditions have led to the curtailing of social programmes and job losses that has forced over 30% of the population below the poverty line.

“We stand ready to discuss concessions which are reasonable,” Edward Scicluna said of his eurogroup companions. “They might even extend the Greek debt itself, short of writing off any portion of the outstanding debt, which with regards to Malta stands at €188 million, €50m of which were loaned directly to Greece [in bilateral loans].”

Scicluna hinted that Malta could be supportive of a more lenient approach with Greece.

“The suffering [in Greece] is not coming from the size or terms of the debt but the conditions imposed by the Troika. These conditions may be open to negotiations and reasonable concessions sought.”

The troika of lenders that bailed out Greece – the European Union, European Central Bank, and International Monetary Fund – imposed big budgetary cuts and restructuring in return for the money.

But Greek’s new prime minister, Alexis Tsipras said: “The troika for Greece is the thing of the past.”

On Monday evening, Jeroen Dijsselbloem, who heads the eurozone finance ministers’ group, said Greece must “stick to the rules” and that there was “little support for a write-off in Europe.”

“I strongly believe in working with all the 19 eurozone members… and I won’t let go any of them. The same goes for Greece,” he said of speculation about a Greek exit from the single European currency. “Greece’s future is in the eurozone. That’s a good basis to start from.”

He described the mood inside the eurogroup meeting of finance ministers as “normal” in a press conference today. “We are finance ministers. We look at things realistically,” Dijsselbloem said, promising a “pragmatic” approach towards Greek demands to renegotiate bailout conditions.

But Klaus Regling, the current Chief Executive Officer of the European Financial Stability Facility, the vehicle through which the rest of the EU member states forwarded Greece €240 billion, was more circumspect about the options for a renegotiation.

“Everyone knows the figures. In 2012 interests rates on Greek debt were lowered, repayment periods lengthened, there was an interest rate deferral on the first 10 years… all representing savings for the Greek budget of €8.7 billion or 4.5% of GDP… and this is repeated every year. All this adds up to a reduction of 40%... I think this is a good reminder of the way things are.”