By George Georgiopoulos and Renee Maltezou
ATHENS Aug 4 Incoming European Commission
President Jean-Claude Juncker played down on Monday the option
of an outright writing off of part of the euro zone loans to
Greece to make the country's debt more manageable.
But in his first visit since being elected to lead the
Commission, he praised Greece as an example for debt-stricken
nations like Argentina to follow, a show of support for the
country where the euro zone debt crisis began.
Bailed out twice by the European Union and International
Monetary Fund, Greece has sharply reversed course since nearly
crashing out of the euro in 2012. But it is still expected to
require further debt relief, talks on which are expected to
start later this year.
Juncker's latest comments appeared in line with indications
from Greek and EU officials that Athens will likely get lower
interest rates and an extension of loan maturities rather than
outright write-off of debt as part of any new debt relief.
Asked whether Greek debt could be sustainable without a
so-called "haircut" or writeoff, Juncker declined to go into
specifics but said: "When it comes to Greece, the question
you're mentioning is not part of my meditation."
Juncker has made occasional stops in Greece when he was head
of the powerful Eurogroup of euro zone finance ministers,
including a 2012 visit when he warned Athens was staring at its
last chance to avoid bankruptcy.
But recent visits have largely focused on praising Greece
and he has portrayed himself as an advocate of the country in
the corridors of power in Europe, saying he "fought like a lion"
against talk of kicking Greece out of the euro.
Speaking to reporters after meeting Greek Prime Minister
Antonis Samaras, he dismissed suggestions that Greece was
similar to Argentina, which is facing a new debt crisis since
defaulting in 2002.
"Comparing Greece to Argentina doesn't offer any parallel.
Greece would have been a good example for Argentina to avoid the
problems Argentina was not able to avoid," Juncker said.
Greece's fortunes have revived sharply in recent months. The
country surpassed expectations and posted a budget surplus
before interest payments last year, has successfully returned to
bond markets for two small issues, and is expected to return to
growth this year after a six-year recession.
Still, Juncker cautioned that the euro zone crisis had not
"We have covered a huge distance but we have not yet reached
the end," he said. "Certainly, many developments, events show us
how fragile the situation is not only in Greece but elsewhere.
But there are also positive signs, also in Portugal."
Juncker said he had discussed the case of Banco Espirito
Santo - which Lisbon agreed to rescue - with the Portuguese
prime minister and added: "We are not yet fully out of the
tunnel, and I wouldn't want to give the impression that we've
left all the ills behind but there has been a lot of progress."
"I fully trust Portuguese authorities that they will solve
the problem they are facing in the financial sector," he said.
Juncker, who takes office on Nov. 1, also reiterated that he
would push for growth and investment in Europe as part of his
(Writing by Deepa Babington Editing by Jeremy Gaunt)