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Germany says no debt relief being prepared for Greece
May 4, 2017 / 3:28 PM / in 6 months

Germany says no debt relief being prepared for Greece

BERLIN (Reuters) - No debt relief measures are being readied for Greece, Germany’s Finance Ministry said on Thursday after the Handelsblatt business daily reported measures were under consideration.

A piggybank painted in the colours of the Greek flag with a 20 euro banknote in it's slot, stands amongst various euro coins in this picture illustration taken in Berlin, Germany June 30, 2015. REUTERS/Pawel Kopczynski

The implementation of reforms that Greece agreed to in return for aid would help ensure the sustainability of the country’s debt, the ministry said in a statement e-mailed to Reuters.

“No debt relief is being prepared,” it added.

Regarding possible debt measures, a clear agreement was reached in a statement by the Eurogroup of euro zone finance ministers last May.

“According to that, after the full implementation of the adjustment programme, there will be an assessment of whether debt measures are necessary. That still applies,” it said.

Earlier, Handelsblatt reported that Greece’s international lenders were preparing possible debt relief for Athens for discussion by the finance ministers.

The European Commission, the ESM euro zone rescue fund, the European Central Bank and the International Monetary Fund (IMF)had prepared various debt measures in a document to be sent to the Eurogroup for further discussion, it said, citing people familiar with the document.

FILE PHOTO: A street performer plays with a ball at the Constitution (Syntagma) square near the Parliament building in Athens, Greece July 18, 2015. REUTERS/Ronen Zvulun /File Photo

One option was for the ESM to take over loans paid out by the IMF. The advantage would be lower interest rates charged by the ESM.

Others included extending debt maturities and having the ECB and national central banks send profits made on Greek bonds to Athens through national governments, Handelsblatt reported.

An EU source told Reuters the document was originally a paper by the ESM, not all four institutions, and had been modified on the way to the version Handelsblatt saw.

German Finance Minister Wolfgang Schaeuble attends a lower house of parliament Bundestag session in Berlin, Germany, April 27, 2017. REUTERS/Hannibal Hanschke

“It lays down several options for the restructuring of Greek debt and specifies possibilities which were given by the Eurogroup last May. One of the options still is that ESM would take debt from IMF,” the source said.

“It is not clear yet if the IMF would agree on that.”

Separately, German Finance Minister Wolfgang Schaeuble said in Durban, South Africa that the European Union needed to “exert pressure on national governments to implement ... much-needed reforms.”

“Those countries which received help under European assistance programmes, and therefore had to actually implement unpleasant reforms, and those countries which have kept to the agreed rules are among the most successful countries in the EU today,” he said.

“The problem is therefore not with the rules, but with the lack of implementation of them.”

Reporting by Christian Goetz, Tom Koerkemeier and Michael Nienaber; Writing by Paul Carrel; Editing by Tom Heneghan and editing by John Stonestreet

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