Merkel favours extending Greek debt deadline: report

10th March 2011, Comments 0 comments

German Chancellor Angela Merkel wants to give Greece more time to pay back billions of euros (dollars) in loans from the European Union and International Monetary Fund, the Bild daily said Thursday.

The three-year joint EU/IMF loan, extended to debt-wracked Greece last May, was worth some 110 billion euros ($152 billion).

Athens has two years from the expiry of the loan -- until the end of 2015 -- to repay the debts but Merkel said Athens needed more time to get its fiscal house in order.

"Greece has to deal with the consequences of its serious fiscal policy mistakes. You cannot do that in just three years," said Merkel in a Bild interview to be published Friday, extracts of which were released in advance.

"If we insisted on that, it would create more turbulence," said the chancellor.

However, she rejected a restructuring of Greek debt, according to the paper, saying there were "currently no instruments" to do that.

After 2013, private investors should be involved in any restructuring, she reiterated.

Merkel's reported comments came on the eve of a crunch meeting at which eurozone leaders were due to thrash out the details of a bailout fund to be set up from 2013 to deal with any potential future crises like that seen in Greece.

Such future bailouts would take place "only in an emergency and under strict conditions," said Merkel, adding that loans also had to be repaid.

"Such loans can only be agreed unanimously. Germany can use its veto and I will use it if the preconditions for aid are not in place," Merkel warned.

© 2011 AFP

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