ATHENS (Reuters) - Greece could secure short-term debt relief measures “very soon” if it implements remaining reforms agreed under its bailout program, the head of the euro zone’s bailout fund, the European Stability Mechanism (ESM), said on Saturday.
Under a deal signed last year with euro zone countries, the European Central Bank and the International Monetary Fund, the ESM will provide financial assistance of up to 86 billion euros to Greece by 2018 in return for the agreed reforms.
The parties also agreed that debt relief would be granted in tranches, including short-term measures to extend Greece’s debt, and that there would be a further reduction after 2018 including interest deferrals and interest rate caps.
“We have been working on them (short-term debt relief measures) and they could be implemented very soon,” ESM chief Klaus Regling told Ta Nea newspaper in an interview.
“We hope that the government implements remaining prior actions very soon,” he said, referring to plans to set up a new privatization fund and to push ahead with specific state asset divestments.
After its bailout program ends in 2018, Regling said Greece would be offered longer-term measures, which would help to reduce its debt pile, currently about 176 percent of its gross domestic product.
The IMF, which has not contributed so far to Greece’s third bailout, would like to see those measures implemented sooner before it will participate in the program.
“I know that the IMF would prefer that those decisions be taken sooner, but there is a serious reason for us to do it later because we will be more certain about Greece’s real (financing) needs by then,” Regling said.
Under the bailout, Greece has also committed to attaining a primary budget surplus - excluding debt servicing costs - of 3.5 percent of economic output by 2018.
The IMF has said this target is not realistic and has pushed for softer fiscal goals. But Regling said this target could not change since it was a core element of the bailout deal.
Regling also said Greece could start tapping debt markets next year if it sticks to the agreed reforms.
Asked when exactly this might happen, he said: “I can’t say which month. But some time next year and long before the end of the program because once the program ends ... we will not be financing it (the country) anymore.”
Reporting by Angeliki Koutantou; Editing by Gareth Jones