Greek Short-Term Debt Measures Can Go Ahead, Dijsselbloem Says

Europe’s stability fund can go ahead with short-term debt relief measures for Greece that will ease the nation’s payment obligations.

“I’m happy to conclude that we have cleared the way for the European Stability Mechanism to go ahead with the decision-making procedures for the short-term debt measures, which will be conducted in January,” Eurogroup Chairman Jeroen Dijsselbloem said in an e-mailed statement on Saturday, after he received a letter from Greek Finance Minister Euclid Tsakalotos.

Jeroen Dijsselbloem

Photographer: Jasper Juinen/Bloomberg

Following an announcement by Greek Prime Minister Alexis Tsipras earlier this month that he would spend more on pensions and sales-tax relief, the European Stability Mechanism’s governing bodies put their short-term debt relief decisions for Greece temporarily on hold.

Euro-area finance ministers on Dec. 5 agreed to the short-term measures, which include easing the repayment schedule of bailout loans and swapping debt to mitigate interest-rate risk, while insisting Tsipras’s government adopt more reforms to ensure the nation maintains a proper fiscal record after the end of its current bailout.

“I have received a letter in which my Greek colleague has confirmed his commitment to previous agreements,” Dijsselbloem said. “This again confirms that we continue to work constructively together towards a sustainable financial and economic future for Greece.”

More trouble may lie ahead for the continent’s most indebted state, as the second review of its latest bailout program remains stuck amid persistent demands from the International Monetary Fund to lower the income tax free threshold - a red line the Greek government has said it’s not willing to cross. Completing the review is a condition for the inclusion of Greek government bonds in the European Central Bank’s asset purchase program.

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