European Stability Mechanism (ESM) will present in the coming weeks its proposals on short-term debt relief for Greece, its managing director Klaus Regling said on Thursday in an interview with French newspaper “Les Echos”.
Regling described the three short-term measures: “One is to smoothen the repayment profile,” he said adding that “because there was a repayment, the average maturity is only 28 years and we’re allowed to go up to 32 years”.
“So we can work with that and relatively quickly adjust some of the repayments in order to avoid big jumps in repayments in certain years, and smoothen the profile,” he said.
The second proposal is to look at ways to reduce interest rate risk for Greece. “People expect that interest rates will go up in the future, and we’re talking here about a 30-year period, and so we’re working on ways to protect Greece.”
The third measure is to eliminate an expected jump in interest rates in the year 2017 on a small part of the Greek debt. “And that will save a few hundred million euros,” Regling explained.
Asked when he will present his proposals for these three measures, he replied: “We have the mandate. Over the next few weeks, certainly before the end of the year.”