DUBLIN: Euro zone finance ministers agreed to a four-month extension of Greece’s EU/IMF bailout program, subject to its economic plans being approved in detail with discussions set to start immediately on filling the state’s funding gap.
One long-term option Athens has suggested is swapping debt held by its euro zone creditors for bonds with payments linked to economic growth, a plan that got a cool reception in European capitals earlier this month.
There are issues around it, but I wouldn’t say no in principle,” Noonan said, answering questions about growth-indexed bonds after a speech in London. “But there’s a lot of details to be filled in before we could say yes or no.”
Noonan added that these bonds could present a “grave temptation” to underplay growth if doing so eased the debt burden by not declaring the full strength of economic expansion.
Noonan was among the most critical euro zone finance ministers of Greece’s approach during often ill-tempered talks in Brussels last week, saying Greece’s banking system would have collapsed within days had Athens not compromised significantly and struck a funding agreement.
