Germany sees debt relief for Greece only in 2018

19th May 2016, Comments 0 comments

The German government believes Greece should be granted debt relief only in 2018 after it has fully complied with its EU bailout, according to a finance ministry document seen by AFP Thursday.

Athens is battling to obtain debt relief from its EU creditors, arguing that its burden of loan repayments is too hefty to be sustainable, but Germany has been deeply opposed.

Eurogroup head Jeroen Dijsselbloem has said he wants a deal on relief for the debt-wracked country at a meeting of eurozone finance ministers on May 24.

But the German finance ministry's document, which summarises the bloc's meeting on May 9, suggests that any measures to ease the debt loan would come only in 2018.

"Last June, Eurogroup had said it was ready, if necessary, to examine additional measures to maintain a sustainable level for the financial needs of Greece," according to the document seen by AFP.

"These measures would be granted on condition that the (rescue) programme has been fully implemented in 2018," it added.

German business daily Handelsblatt noted that pushing any debt relief to after 2018 meant Finance Minister Wolfgang Schaeuble would be able to avoid calling a parliamentary vote on the issue before next year's general elections in Germany.

There is general public distaste in Germany, Europe's biggest economy and effective paymaster, for the 86-billion-euro ($96.2-billion) bailout programme for Greece.

Through a series of painful labour market reforms over the years and tight fiscal policy, Germany has managed to bring its own public finances back into the black, and many believe that Greece should do likewise.

The German government also needs to obtain parliamentary approval for each new rescue plan, or to make any substantial modifications on existing ones.

Parliament has until now always approved the government's plans, but the votes have also exposed tensions within Chancellor Angela Merkel's own party on the issue.

The IMF backs Greece on its call for debt relief, and has threatened to pull out of the bailout if Athens does not get concessions for its huge mountain of debt.

It wants the eurozone to let Greece skip paying interest or principal on loans until 2040, the Wall Street Journal reported on Tuesday, quoting unnamed officials.


© 2016 AFP

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