No more debt forgiveness for Greece, says Angela Merkel
German Chancellor stands firm in face of demands from Greece's new anti-austerity government
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German Chancellor Angela Merkel is in no mood to negotiate Photo: TOBIAS SCHWARZ/AFP
2:28PM GMT 31 Jan 2015
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Angela Merkel ruled out cancelling more of Greece’s national debt on Saturday,
appearing to dash the hopes of the country’s new government.
The plan for economic recovery adopted by Syriza, the radical left-wing party
leading the Athens government, calls for half of the debt burden to be
written off.
But the German Chancellor pointed out that Greece had already benefited from
debt forgiveness under the existing bailout plan. “There has already been
voluntary debt forgiveness by private creditors, banks have already slashed
billion from Greece’s debt,” said Mrs Merkel in an interview with Hamburger
Abendblatt, a German newspaper.
She added: “I do not envisage fresh debt cancellation.”
Germany is on a collision course with Greece’s new leaders, who have staked
everything on writing off a high proportion of the national debt, which
stands at 175 per cent of national income.
However, Mrs Merkel sent a conciliatory message by insisting there was no
question of Greece leaving the euro. “The aim of our policy was and is that
Greece remains permanently part of the euro community,” she said. “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.”
Earlier, Wolfgang Schauble, the German finance minister, delivered the same message as the Chancellor. On Friday, he said there was no point “arguing” about a Greek debt write-off, adding: “What’s more, we are difficult to blackmail.”
Yanis Varoufakis, the Greek finance minister, has refused to negotiate with the “troika” of lenders who have provided a 240 billion euro bailout - the European Central Bank, the International Monetary Fund and the European Commission. Instead, he insists on dealing directly with the donor governments themselves, which principally means Germany.
”We have no intention of working with a committee of officials overseeing a programme suffocating the country and rejected outright by the government,” said Mr Varoufakis on Friday.
He spoke beside Joroen Dijsselbloem, the Dutch chairman of the eurozone’s finance ministers, who showed his displeasure by leaving the press conference early. “Taking unilateral action or ignoring commitments is not the step forward,” said Mr Dijsselbloem. “We have a mutual interest in seeing Greece’s recovery inside Europe.”
Alexis Tspiras, the new Greek prime minister, has no plan to visit Germany yet. The lenders fear that if they write off Greek debt, other countries will claim the same privilege.
Earlier, Wolfgang Schauble, the German finance minister, delivered the same message as the Chancellor. On Friday, he said there was no point “arguing” about a Greek debt write-off, adding: “What’s more, we are difficult to blackmail.”
Yanis Varoufakis, the Greek finance minister, has refused to negotiate with the “troika” of lenders who have provided a 240 billion euro bailout - the European Central Bank, the International Monetary Fund and the European Commission. Instead, he insists on dealing directly with the donor governments themselves, which principally means Germany.
”We have no intention of working with a committee of officials overseeing a programme suffocating the country and rejected outright by the government,” said Mr Varoufakis on Friday.
He spoke beside Joroen Dijsselbloem, the Dutch chairman of the eurozone’s finance ministers, who showed his displeasure by leaving the press conference early. “Taking unilateral action or ignoring commitments is not the step forward,” said Mr Dijsselbloem. “We have a mutual interest in seeing Greece’s recovery inside Europe.”
Alexis Tspiras, the new Greek prime minister, has no plan to visit Germany yet. The lenders fear that if they write off Greek debt, other countries will claim the same privilege.