Merkel rules out further debt relief for Greece

German chancellor speaks against debt cut as Greece’s anti-austerity government seeks waiver some of its debt.

Greece's Finance Minister Yanis Varoufakis, right, will travel to Paris in a bid to form alliances within the EU [AP]
Greece's Finance Minister Yanis Varoufakis, right, will travel to Paris in a bid to form alliances within the EU [AP]

German Chancellor Angela Merkel has rejected the prospect of debt relief for Athens, adding to tensions between Greece’s new leftist government and its international creditors.

“There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece’s debt,” Merkel said in an interview with the Hamburger Abendblatt newspaper published on Saturday.

“I do not envisage fresh debt cancellation,” she said.

The Syriza party, which came to power last week, has already begun to roll back years of austerity measures demanded by the EU and the International Monetary Fund in return for a $269bn bailout granted to avoid a financial meltdown in 2010. The new government headed by 40-year-old Alexis Tsipras says it will negotiate to halve the debt.

At the start of 2012, Greece restructured its debt in a deal involving private creditors who took “haircuts” or wrote down parts of their holdings. This cut Greece’s total debt burden by about 100 billion euros.

But the country is still lumbered with a debt pile of more than 315 billion euros, upwards of 175 percent of gross domestic product, a record for the European Union.

“Europe will continue to show its solidarity with Greece, as with other countries hard hit by the crisis if these countries carry out reforms and cost-saving measures,” Merkel said.

No to international creditors

Prime Minister Tsipras will visit Italy and France on Tuesday and Wednesday, but has no immediate plans to visit Germany, Europe’s biggest economy and effective paymaster.

On Friday, Greece’s new Finance Minister Yanis Varoufakis said he will not negotiate the terms of the country’s bailout with the “troika” team from the European Union and International Monetary Fund (IMF) overseeing it.

Varoufakis also planned to travel to Paris on Saturday as part of the anti-austerity government’s search for EU allies.

“The minister will travel to Paris on Saturday instead of Monday,” a spokesman told AFP, adding that Varoufakis was expected to hold meetings on Sunday.

Varoufakis, a maverick economist opposed to fiscal cuts, was originally due to meet with French counterpart Michel Sapin and Economy Minister Emmanuel Macron on Monday afternoon.

Source: News Agencies


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