17th Aug 2015 13:21
BERLIN (Alliance News) - Germany said on Monday that writing down Greece's debt would not help resolve the crisis, adding that relief through longer maturities and lower interest rates is more viable.
"From Germany's perspective it is a success that a haircut as well as a nominal cut in debt is no longer talked about," said Chancellor Angela Merkel's spokesman Steffen Seibert, confirming that Berlin was prepared to consider debt relief for Greece.
The International Monetary Fund (IMF) has made debt relief a condition for joining Greece's third bailout in five years, arguing that its debt level was unsustainable.
"At most, there is limited room for improvement in terms of the maturities for loans or the amount of interest charged," German Finance Ministry official Jens Spahn told dpa.
Greece's debt-to-GDP ratio stands at 175% - up from 120% when it received its first bailout five years ago.
But said Spahn: "A haircut is and will remain excluded under the eurozone contract."
He was echoing comments by Chancellor Angela Merkel on Sunday in which she stressed that there was some room for providing Greece with debt relief through longer maturities or lower interest rates.
Merkel wants to head off the threat of a major revolt in the ranks of her conservative-led political bloc when the German parliament votes on Wednesday on Greece's 86-billion-euro (96-billion-dollar) rescue plan.
The first test of the degree of opposition to the bailout among members of Merkel's Christian Democrats (CDU) and their Bavarian-based allies, the Christian Social Union (CSU) is likely to come on Tuesday when CDU-CSU lawmakers meet to consider the package.
In July, 60 lawmakers - about one fifth of Merkel's 311-member parliamentary bloc - voted against launching the bailout negotiations with Athens. Another five lawmakers abstained.
A larger number of parliamentarians rejecting the new Greek bailout in Wednesday's Bundestag vote could be a blow to Merkel.
Still, an overwhelming majority of the Bundestag is expected to back the bailout with the left-leaning Social Democrats (SPD) and the environmentalist Greens set to vote for the rescue plan.
Together, Merkel's CDU-CSU bloc and the SPD, its junior coalition partner, control about 80% of the votes in the 631-strong Bundestag, which is one of a handful of eurozone parliaments that are set to consider the bailout.
Merkel's government has repeatedly stressed the need for the IMF to sign up to the bailout to help rally support among CDU-CSU lawmakers.
A spokeswoman for Merkel said on Friday that the Washington-based organization's participation was of "decisive importance" for Berlin.
Merkel's government sees the IMF's involvement as helping to enforce a rigorous monitoring of Greece under the rescue programme.
German Finance Minister Wolfgang Schaeuble failed to secure a guarantee at last Friday's meeting of eurozone finance ministers that the IMF will be part of the financial lifeline.
Still, Merkel expressed confidence in a Sunday interview with German public television that the IMF would eventually come on board.
The IMF took part in Greece's last two bailouts.
A spokesman for Schaeuble, Marco Semmelmann said on Monday, Germany expects the IMF to make a decision in October when a review of Greece's progress in implementing the reforms demanded as part of the deal.
Copyright dpa