Debt relief will be the primary topic going forward when it comes to Greece and its creditors. This has been one of the thorniest issues in the past and has dominated the discussion between the two parties. The international monetary fund has advocated in the past that the EU officials should consider cutting the debt if they are serious about the Greek growth. However, the fund itself has not announced any such measures so far and it if the IMF is serious about the debt relief, perhaps they should take the lead on this.
The managing director of the IMF has also said that debt relief is the most significant aspect, however, so far she has only advocated in extending the maturities on Greek loan. Last week, on Friday she said that the only possible way for the third bailout to do its magic is only if there is a debt restructure. The talks for the third bailout for Greece are expected to open today. However, so far, Germany has been the biggest obstacle when it comes to the talks of debt relief.
Nonetheless, the pressure is building up on Germany, it is likely that the country’s hand will be forced further in the coming days to accept the debt relief. The biggest concern for Germany is that this could set up a pattern for other countries and all of a sudden they may have to start following this pattern for other European countries. However, so far the only possibility which seems more likely is extending the maturity date and lowering the interest rate. The debt relief agenda is going to be a big struggle for Chancellor Angela Merkel to sell this to her public.