Greece debt report backs cuts plan / Greece seeks two-year austerity extension

Author (Person)
Series Title
Series Details 15.8.12
Publication Date 15/08/2012
Content Type

The FT reported on the 15 August 2012 that the Greece was seeking a two-year extension of its latest austerity programme aimed at improving the country’s debt sustainability and prospects for a return to growth.

The extension plan called for a slower adjustment with cuts spread over four years until 2016, and the budget deficit declining annually by 1.5% of national output rather than 2.5% under the present arrangement.

A FT editorial suggests that with the publication of the 'debt sustainability report' by Greece the country was facing up the serious situation more realistically. 'The analysis takes on board the all-important fact of a much deeper recession than the adjustment programme assumed. That makes deficit cuts harder to find and more likely to be counterproductive. If the Greeks are willing to do the right thing, there is a case for giving them more time to do it'.

Politicians’ reluctance to allocate any more funding to a eurozone member that has consistently shirked its reform obligations since 2010 was one reason why EU officials ruled out an extension of Greece’s bailout deal when the idea was earlier floated by the new Greek government in June 2012.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email to buy additional rights.

Angela Merkel, German Chancellor, was due to meet Antonis Samaras, the Greek prime minister, for bilateral talks in Berlin the following week, at which 'everything can be put on the table', according to Steffen Seibert, the Chancellor’s spokesman on the 15 August 2012.

He suggested that the German government stuck to its insistence that Greece must comply with the reform and austerity conditions agreed in its €130bn rescue package, but did not flatly reject any extension of the debt repayment terms it faced.

Related Links
ESO: Background information: Greece agrees €11.5bn spending cuts
Kathimerini, 14.8.12: Spending moratorium in place
EUObserver, 15.8.12: Greek PM to ask for softer bailout terms
Spiegel Online International, 15.8.12: Greece to Request Extension on Austerity Measures
Spiegel Online International, 15.8.12: Only Bankruptcy Can Help Now
Spiegel Online International, 15.8.12: The Return of the Iron Chancellor

Countries / Regions