Handelsblatt: Institutions preparing debt relief package for Greece

Greece’s lenders are preparing a debt-relief package for the country, German newspaper Handelsblatt said in an article published on Thursday, citing sources who have seen the proposal.

The text on the proposal will form the basis for further talks and will be sent to the finance ministers of the Eurozone, the paper said.

According to the report, the proposal consists of a debt swap in which the European Stability Mechanism (ESM) “would purchase 13 billion euros of Greece’s IMF loans outstanding in 2019 and beyond, using funds likely to be untapped in Greece’s bailout program to make the purchase. The ESM would offer lower interest rates and a longer maturity, providing Athens with significant relief.”

The report says the German government does not object to this idea in principle but views it as one of many. However a decision will not be made until after the current bailout program expires in the middle of the coming year, it says, adding that Greek debt sustainability could only be reviewed after the current bailout program expires.

Other options being considered are extending the maturity on Greece’s debts by 10 to 15 years or for the ECB and the national central banks to pay back to Athens the earnings they have made from Greek bonds.