Juncker backs changing Greek debt 'troika'

(BRUSSELS) - EU Commission chief Jean-Claude Juncker backs a change to the "troika" mission, the widely-loathed team tasked with enforcing Greece's international bailout, his spokesman said Monday.

Greece's new leftist Prime Minister Alexis Tsipras has demanded an end to the oversight system, which groups the International Monetary Fund, European Commission and European Central Bank.

Tsipras is due to meet Juncker on Wednesday as part of a European tour aimed at drumming up support for his demands to end austerity, restructure Greece's debt and scrapping the troika.

Germany's Handelsblatt newspaper reported on Monday, without naming any sources, that Juncker wanted to end the troika system that was put into place after Greece's first bailout in 2010 and find an alternative.

Asked about the reports, Juncker's spokesman Margaritis Schinas said he could only "reiterate" what the Commission chief had already said when he was first elected in July.

He quoted Juncker as saying: "We should be able to replace the troika with a more democratically legitimate and more accountable structure based around European institutions."

But Schinas added: "We have not envisioned any new structure, we do not have a new formula."

"I will not go into further speculation before a global understanding is reached," he added.

The crisis over the new Syriza party government has revived fears of a possible Greek exit from the 19-country eurozone, a so-called "Grexit".

Schinas warned that any decision to overhaul the troika inspectors or any other issue concerning the bailout of Greece, would have to win the unanimous approval of all eurozone member states.

"Everything has to be agreed at this stage by all 19 members of the eurozone," he said.

Juncker himself declined to speak about the issue on Monday.

"I have already said that these are difficult discussions," he said when asked about the Greek situation after a meeting with Swiss President Simonetta Sommaruga, refusing to answer any more questions on the topic.

- Debt mountain -

Despite a restructuring in 2012, Greece is still grappling with a debt pile of more than 315 billion euros ($355 billion), which represents around 175 percent of its gross domestic product (GDP), a record for the EU.

Created in May 2010, the troika mission pooled resources from the EU, IMF and ECB to build and enforce the bailout, which has grown to a commitment of 240 billion euros ($271 billion), to help Greece sustain its debts and avoid an exit from the eurozone.

The IMF already called into question the effectiveness of the troika's mission to Athens in a June 2013 report in which it said there was "no clear division of labour" and the European partners lacked the experience and ability to manage large aid programmes.

The issue is likely to dominate an EU summit on February 12 and a meeting of eurozone finance ministers the following week.

A European source said the "first priority is to reach a deal on what happens after February 28", the date to which Greece's bailout was extended by its creditors at the end of last year.

With Greece's next repayment due in May, "ideally, the Commission wants an extension until June or July, to avoid scaring the markets."

But the longer-term options are far harder, with the EU possibly opening to cutting the interest on Greece's debts or lengthening its repayment term, but against the idea of wiping out Greek debts.

"In the eurozone, there is little appetite for a haircut," the source said, using the term for forcing investors to lose some of their investments as part of a debt settlement.

Finland, the Baltic states, the Netherlands and to a certain extent Germany were strongly opposed to giving any "gift" to Greece, while Portugal and Spain were also largely opposed.