Merkel insists Greece debt haircut 'out of the question'

GMT 16:50 2015 Thursday ,09 July

Arab Today, arab today Merkel insists Greece debt haircut 'out of the question'

German Chancellor Angela Merkel
Sarajevo - AFP

German Chancellor Angela Merkel reiterated Thursday that she opposes a debt "haircut" for Greece, a day after IMF chief Christine Lagarde called for debt restructuring for the crisis-hit country.

"I have said that a classic haircut is out of the question for me and that hasn't changed between the day before yesterday and today," Merkel told reporters on a visit in Sarajevo.

Merkel said she couldn't yet comment on the latest proposals the left-wing government in Athens was preparing for the three creditor institutions -- the EU, European Central Bank and International Monetary Fund.

"I am currently not in a position (to say) -- and can only do so once the three institutions have made an assessment -- what it means and whether the programme is sufficient for the next three years, and what it means in terms of debt sustainability," Merkel said.

Merkel said the creditors had since 2012 looked at Greece's debt sustainability and had previously extended payback periods for loans, but she insisted that she opposes a classic haircut or debt write-down.

Later in the German business capital Frankfurt, Finance Minister Wolfgang Schaeuble was also asked about possible debt relief for Greece.

"Debt sustainability is not feasible without a haircut and I think the IMF is correct in saying that," he told a central bank conference.

"But I'm also saying... there cannot be a haircut because it would infringe on the system of the European Union and after all the European Union is a community of common laws."

He said Greece had in 2012 already been given debt reprofiling -- or more time to repay what it owes.

"So the leeway we have on the restructuring of debt or the reprofiling of debt is very low," Schaeuble said.

"In the days to come we will of course discuss whether there is an option still but I'm more sceptical in that respect than Mr (Michel) Sapin," his French counterpart, who was attending the same Frankfurt conference.

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