Olli Rehn: Greece is unlikely to get a debt writedown

The former Commissioner believes that Greece’s first priority must be to eliminate the political uncertainty in the country

In an interview to Bloomberg news agency, former European Union economic and monetary affairs commissioner Olli Rehn expressed the opinion that Greece is unlikely to get a writedown or “haircut” on debt owed to the euro zone.

Instead, the country should focus on claiming longer repayment periods, Mr. Rehn underlined, adding that, according to his opinion, “there’s not much room for maneuver in renegotiating the terms of the economic-adjustment program.”

The former Commissioner believes that Greece’s first priority must be to eliminate the political uncertainty in the country, first by reducing the time required to build a new government and second by resuming the negotiations for the next steps on the EU-IMF program.

Moreover, Mr. Rehn said that an inconclusive election on January 25 would be a negative development for Greece, stressing that the country “should avoid a replay of 2012 when a political stalemate led to twin parliamentary ballots over six weeks.”

With regard to Grexit scenarios, Rehn noted that, although the euro area is better prepared now to handle any Greek crisis, that doesn’t make the idea of a Greek departure from the single currency more plausible.