Earn your haircut Greece is told

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Earn your haircut Greece is told

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As Greece waits for the release of 31 billion euros of emergency loans one top official has said the country will have to earn any, “haircut” on its debt.

Jens Weidman a member of the governing council of the European Central Bank believes a writedown of some of the debts will only make sense as a reward for completing a reform package that puts Greece’s finances on a sustainable basis.

The words come on a day there were hints the IMF and eurozone governments would work to overcome their differences at a crucial Eurogroup meeting next week.

“It is a question of working hard, putting our mind to it, making sure that we focus on the same objective which is that the country in particular, Greece, can operate on a sustainable basis, can recover, can get back on its feet, can re-access markets as early as possible,” Christine Lagarde, International Monetary Fund Managing Director told reporters during her tour of Asia.

Lagarde will cut short her tour to attend that meeting on Greece next week. At the heart of the disagreement over the bailout fund is the time the country should be given to lower its debt.

Eurozone finance ministers say the country should be given until 2022, Lagarde has insisted on the existing target of 2020.

Banks, insurers and other private sector investors holding about 206 billion euros of Greek bonds took a 53.5 percent reduction in the nominal value of their securities earlier this year.