European Stability Mechanism (ESM) Managing Director Klaus Regling appeared categorically against the prospect of a "haircut" for the Greek debt, without however, ruling out relief measures such as an extension of repayment terms.
Regling's comments were carried in the Vienna daily "Der Standard" over the weekend amid a very sensitive phase in (distance) negotiations between the Greek side and its institutional creditors towards a second review of the Greek program (third bailout) -- and just before a EWG meeting convenes on Monday afternoon.
In case relief is deemed necessary, Regling said an improvement in lending terms would then decided. Moreover, he more-or-less echoed the standing position out of official Berlin, namely, that due to harsh adjustment measures implemented so far Greece does not currently face a problem of servicing its debt.
"When the (bailout) program ends in 2018, then the debt sustainability will be assessed; if there is a need (then) we'll act," he said.
The powerful ESM head also said that he expects that the IMF will also not press for a "haircut".
"It (Fund) wants immediate decisions for debt relief, not after the conclusion of the program in August 2018," he added.
Asked if the country is gradually exiting the economic crisis, Regling responded: "Unfortunately, it's not that easy. I would say that the Greek economy is again at an impasse."
His comments came almost simultaneously with a high-profile statement by new Greek Economy & Development Minister Dimitri Papadimitriou, who urged the IMF to "make up its mind" on the Greek program.
The US-based economist and noted academic told Bloomberg that the path to recovery runs sequentially through completion of Athens' bailout review, debt relief and then re-admission to the European Central Bank’s QE program.
“The IMF has changed its opinion many times... It’s very hard to know whether in fact they want to be in or they want to be out. I think they do want in, and we want them to be in," he said.
