The impact of the short-term measures for Greek debt relief announced by the last Eurogroup meeting will have a significant impact on the sustainability of the country’s debt, the managing director of the European Stability Mechanism (ESM) Klaus Regling said on Tuesday in ESM’s monthly newsletter.
“The impact of the measures is sizeable, which is another sign of the financial solidarity that euro area countries are willing to provide. The measures will help to put Greece’s annual debt payments on a more sustainable footing, and support Greece on its way back to the market. There are also some upfront costs, but these will be borne entirely by the country itself,” Regling says.
The head of the ESM also said the measures will also mean a slight increase in the fund’s funding volume for next year. “This is to cover liquidity needs for some of the different schemes that we will use, such as the bond exchange with the Greek banks, and collateral needs for the swap arrangements,” he said.