Greece sees final solution on debt crisis amid euro uncertainty

Sun Dec 4, 2016 12:22pm EST
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ATHENS (Reuters) - Political uncertainty in Europe has created fresh momentum for a "comprehensive and permanent" solution to the Greek debt crisis before the year ends, a government spokesman said on Sunday.

Euro zone finance ministers will meet in Brussels on Monday to discuss short-term debt relief for Greece, and Germany's Wolfgang Schaeuble said it must implement reforms instead of hoping for further debt forgiveness.

Greece remained optimistic for a final debt deal, however, just as Italians are voting on a constitutional referendum on Sunday and a victory for the opposition 'No' camp may push the euro zone toward fresh crisis.

"Everyone realizes that Europe cannot stand a rekindling of the Greek crisis, when there are issues with Italy and amid a pre-election period in many European countries," Dimitris Tzanakopoulos told Athens 9,84 radio.

"The general uncertainty which prevails in Europe - which is both political and financial - creates ... a momentum for a comprehensive and permanent solution for the Greek issue."

Bank of Greece Governor Yannis Stournaras said new measures were needed to lighten Athens' debt burden. One option would be to extend the maturity of already granted long-term aid loans by some 20 years.

"Greece needs debt sustainability and more realistic fiscal targets after the completion of the current adjustment program (in 2018)," Stournaras told German business daily Handelsblatt in an interview to be published on Monday.

Athens has received three international bailouts since 2010 and its debt, at about 180 percent of GDP, is still the highest in the euro zone.

Talks between Athens and its official creditors as part of a bailout review have hit a snag on labor reforms including reviving collective bargaining on minimum wage and mass layoffs, in a country where unemployment stands at 23 percent.   Continued...

Euro coins are seen in front of a displayed Greece flag in this picture illustration, June 29, 2015. REUTERS/Dado Ruvic/File Photo