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Eurozone unblocks debt relief for Greece

Tuesday, January 24, 2017 - 07:14

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The eurozone in December suspended debt relief for bailed-out Greece, largely comprising measures to ease the interest burden, after Prime Minister Alexis Tsipras hiked spending for pensioners, angering austerity champion Germany.

[BRUSSELS] Eurozone finance ministers unblocked debt relief measures for Greece on Monday, ending a row with Germany over surprise Christmas handouts announced by the Athens government.

The European Stability Mechanism, the eurozone's crisis backstop grouping its 19 finance ministers, "approve(s) short-term debt relief measures for Greece," a statement from the ESM said.

The eurozone in December suspended debt relief for bailed-out Greece, largely comprising measures to ease the interest burden, after Prime Minister Alexis Tsipras hiked spending for pensioners, angering austerity champion Germany.

Mr Tsipras sparked the fight after announcing holiday-season handouts including a surprise payout to 1.6 million low-income pensioners and a temporary sales tax break for islands sheltering thousands of migrants.

sentifi.com

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The handouts stoked divisions at the heart of the eurozone, with France defending Athens in a rare act of defiance towards Germany's powerful finance minister, Wolfgang Schaeuble.

The debt relief in question was agreed by eurozone ministers on December 5 in the face of criticism by the International Monetary Fund that it fell well short of what was necessary to get Greece back on its feet.

Klaus Regling, the head of the European Stability Mechanism, defended the measures on Monday as "an important step towards improving Greek debt sustainability".

AFP

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