Daily Times: Greece cannot tap credit markets without debt cut

Greece will not be able to return to credit markets as planned without debt relief, the struggling country’s central banker said Monday.

“If the Greek debt is not judged to be viable, the expected market exit in 2018 is not possible,” Bank of Greece governor Yannis Stournaras told a business lobby.

“The talks must begin now and be concluded as soon as possible.”

“Besides, the debt talks have been a pledge by the creditors since 2012, repeated last May, and still not fulfilled,” Stournaras said.

Prime Minister Alexis Tsipras has said that with a debt relief deal, Greece could even return to markets next year.

Athens has not issued long-term debt since a one-off sale in 2014, its sole attempt since the start of the crisis in 2010.

The debt issue has divided the country’s international creditors for months.

Germany, which holds elections next year, opposes debt relief as unnecessary, but tackling the problem is a firm demand of the International Monetary Fund.

In May, the IMF said the only way Greece can expect to achieve a sustainable fiscal position and look to a stronger economy is debt relief that involves a combination of extending the maturity of its debt, substantial deferrals of interest and principal payments and fixing the interest rate on its debt at 1.5 percent at most through to 2040.

Tsipras on Saturday said Greece was fulfilling its promises and demands the same of its creditors.

“Delays, stalling tactics and postponements cannot and will not be accepted,” he told his party ahead of the start of a new audit by its creditors.

“We claim all that was foreseen in the agreement, immediately,” he said, referring to a May deal by eurozone finance ministers promising debt relief measures to be “phased in progressively” by 2018.

Greece’s debt will grow to 315 billion euros ($346 billion) or 178.9 percent of output this year.

Source: Daily Times