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Merkel: 'No debt reduction for Greece'

January 31, 2015

German Chancellor Angela Merkel has rejected any idea of offering more debt relief to Greece. Her comments come amid growing tensions between the new Greek government and its international creditors.

Angela Merkel Photo by Sean Gallup/Getty Images
Image: Gallup/Getty Images

Merkel told the German daily Hamburger Abendblatt's Saturday edition that banks and creditors had already forgiven a considerable amount of Greece's debt and that she rejected any further concessions.

"There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Merkel told the paper, adding: "I do not envisage fresh debt cancellation."

But she told the paper that she still wanted Greece to remain part of the eurozone.

"Europe will continue to show its solidarity with Greece, as with other countries hard hit by the crisis, if these countries carry out reforms and cost-saving measures," she said.

Her comments were echoed by German Finance Minister Wolfgang Schäuble, who told the Saturday edition of the Welt newspaper that he saw no need to talk of any debt reduction, as "anyone informed about the financing of Greek debt knew that by 2020 there would be no problems."

'No cooperation with troika'

The new Greek government, led by the left-wing Syriza party, has said it wants to negotiate to halve the country's debt, which still amounts to more than 315 billion euros ($355.48 billion) despite a debt restructuring at the start of 2012 that cut the burden by some 100 billion euros.

At more than 175 percent of gross domestic product (GDP), the sum is a record for the European Union.

The government has also pledged to roll back austerity measures imposed by the European Union and the International Monetary Fund in exchange for a 240-billion-euro ($269-billion) bailout granted to avoid a financial meltdown in 2010.

On Friday, Greek Finance Minister Yanis Varoufakis told the head of the Eurogroup that his country was no longer willing to cooperate with the "troika" of international auditors - the European Commission, the European Central Bank and the International Monetary Fund - that has been monitoring Athens' adherence to the austerity demands.

Varoufakis said he would not be asking for an extension of the bailout program, as his country disputed the wisdom of having instituted the program in the first place.

Greek Prime Minister Alexis Tsipras will be visiting Italy and France on Tuesday and Wednesday to present his proposals for solving Greece's debt problem.

No visit to Germany - Europe's biggest economy and effective paymaster - has yet been planned.

tj/bk (AFP, Reuters, dpa)