Germany Says No Debt Relief for Greece Before Reforms are Implemented

Friday, May 5th, 2017
Last Update: 12:27

The German Finance Ministry on Thursday said that no debt relief measures are being prepared for Greece, in answer to a report by Handelsblatt business daily, Reuters says.

The German newspaper reported that Greece’s creditors (the European Stability Mechanism, European Commission, European Central Bank and International Monetary Fund) are drafting a document with a series of measures to ease the country’s debt. The document would be presented to euro zone finance ministers for discussion.

However, Germany’s Finance Ministry e-mailed a statement to Reuters saying that, “No debt relief is being prepared” because Greece needs to implement the reforms it agreed to in order for its debt to become sustainable.

The statement further said that in May 2016 Greece agreed to certain reforms and “after the full implementation of the adjustment program, there will be an assessment of whether debt measures are necessary. That still applies.” Greece’s bailout program ends in August 2018.

According to Reuters, an EU official said that the document was drafted by the ESM, not all institutions. One of the options was that the ESM would take the IMF debt so that Greece pays lower interest rates to the EU rescue fund. However, the source told Reuters, “It is not clear yet if the IMF would agree on that.”

According to Reuters, German Finance Minister Wolfgang Schaeuble said in Durban, South Africa that, “Those countries which received help under European assistance programs, 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.”

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

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