Gabriel urges debt relief for Greece before euro talks | News | DW | 09.05.2016
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Gabriel urges debt relief for Greece before euro talks

Germany's vice chancellor has urged debt relief for Greece. Sigmar Gabriel says any more austerity would kill off the country's "little green shoot of economic recovery."

Despite opposition from German officials, on Monday eurozone finance ministers are likely to discuss debt relief among their next steps on Greece's credit woes. The centrist Social Democratic Party (SPD) leader, Vice Chancellor and Economy Minister Sigmar Gabriel, however, has broken ranks with fellow members of the governing coalition.

Speaking in Berlin ahead of Monday's eurozone meeting in Brussels, Gabriel called on the finance ministers "to finally take a step so that Greece doesn't have to beg anew every year for more credit." More bluntly, he added: "Something needs to be done to reduce the debt burden."

On Sunday, the 153 lawmakers of the governing coalition between Syriza and the Independent Greeks voted to raise taxes and cut pensions as demanded by the country's international creditors. The other 147 members of the 300-seat parliament - and many Greeks - opposed the bill.

'Little green shoot'

The International Monetary Fund recommends debt relief to allow Greece to return to growth. The IMF has also called for focusing discussion on capping annual credit-servicing costs at 15 percent of gross domestic product.

On Monday, Gabriel said that after years of stagnation, Greece had begun "seeing economic growth for the first time." He added: "And what some are now demanding, the next step in the savings program, will destroy this little green shoot of economic recovery in Greece - and so it must not become European policy."

Economy Ministry spokeswoman Beate Braams said Gabriel had made his comments "in his role as party chairman" of the Social Democrats, with the aim of "giving Greece a prospect" of recovery. In Berlin, however, German government spokesman Steffen Seibert said the eurozone finance ministers would have to review Greece's latest steps toward austerity before deciding on debt relief. And in Brussels, German Finance Minister Wolfgang Schäuble met his Greek counterpart, Euclid Tsakalotos, ahead of the eurozone ministers' meeting to work out a compromise, officials said.

The international creditors want Greece to pass austerity legislation now that would automatically kick in in 2018 should the country fail to achieve the 3.5 percent primary surplus target they have set. In a letter to eurozone finance ministers last week, Tsakalotos wrote that such steps would prove impossible to legislate under Greece's existing legal system.

The IMF has calculated a more likely number of just 1.5 percent.

mkg/ (Reuters, AFP, dpa, AP)