Greek debt relief is at the top of Tsipras agenda, Reuters cites Syriza source

cep economist Kullas says a nominal haircut would impact stronger than extending maturities or lowering interest rates

Negotiations over Greece's debt will top the agenda for Prime Minister-elect Alexis Tsipras, a senior source from his Syriza party said according to Reuters. “We will continue negotiations in the coming period, with the debt issue being the first and most important battle,” Reuters cited the source as saying.

cep economist Matthias Kullas also believes that a debt cut is necessary. However, it should only happen once Greece has implemented the bulk of the reforms agreed with its lenders, he said. “Regarding the burden put on the creditors, it does not make any difference if they grant Greece longer maturities and lower interest rates or a nominal haircut,” Kullas argued. “Empirical research has shown that – at the same level of debt relief – a nominal haircut shows a stronger impact.”