Eurozone, IMF at odds over when Greece should get debt relief

The eurozone and International Monetary are struggling with Greece’s debt crisis – not with Athens this time, but with each other over when to give Greece a break on its future massive debt repayments.

The eurozone has begun talks on debt relief for Greece but wants to postpone the final decision until 2018; the IMF insists Greek debt repayment is unsustainable and investors need clarity now.

Eurozone finance ministers are likely to forge a tentative plan when they meet next Tuesday – what in Brussels-speak is known as a political agreement. But their offer is unlikely to be anything but highly conditional, eurozone officials preparing the talks said.

The gist is to find a way to lower Greece’s debt-repayment burden without actually cutting the debt itself via a so-called haircut. Instead, Greece’s debt would be “re-profiled” – less interest, longer maturities, limits based on growth etc.

On May 9, the ministers asked their deputies to explore such specific measures which could be offered to Greece “if necessary” at the end of the bailout in 2018 if Greece implements all the agreed reforms.

The caveat “if necessary” has appeared in all eurozone statements on Greek debt relief...