Germany rules out Greek debt haircut

Vice Chancellor Gabriel says reducing the public debt would be unfair to German and European taxpayers

Vice Chancellor Gabriel says reducing the public debt would be unfair to German and European taxpayers

BERLIN – The German government has ruled out Wednesday a haircut on Greek debt.

But Berlin has signaled readiness to discuss ways to achieve the goals of the austerity and reform programs imposed by the bailout.

“I cannot imagine any haircut on the debt. That would be unfair to German and European taxpayers,” Germany’s Economic Affairs and Energy Minister and Vice Chancellor Sigmar Gabriel said at a press conference in Berlin.

“If Greece says I can achieve the goals of the agreed-upon program through other ways, than one has to look into that. But one cannot ask others to pay for the responsibilities that should be born by Greece itself,” Gabriel said. 

Greece's new Prime Minister Alexis Tsipras had promised to achieve a write-down of at least half of Greece's €320 billion ($363.23 billion) debt, during his election campaign.

Tsipras also promised to put an end to the austerity measures imposed in exchange for the country's bailout by the so-called Troika, the International Monetary Fund, the European Central Bank and the European Commission.

German Vice Chancellor Gabriel said the new Greek government should focus on economic and administrative reforms, fight corruption and stick to the contractual agreements made between Athens and its European partners.

He underlined that the European countries so far provided €278 billion ($315.5 billion) for the Greek bailout program, and would like to continue showing solidarity with Athens based on the contractual agreements.

Gabriel dismissed speculation over a possible Greek exit from the Euro-zone.

“We have not made available 278 billion euros to have Greece exit from the euro. We could have done it cheaper,” he said.

Gabriel underlined that it was economically, politically, and culturally important to continue have Greece within the Eurozone.

“Our political position is clear. We do not want Greece’s exit from the euro. But it is up to the Greek government to decide on that,” he said.

Greece’s radical-left SYRIZA leader Alexis Tsipras won 36.3 percent of the vote in the country's elections on Sunday, and formed an "anti-austerity" coalition with the right-wing Independent party. Both parties strongly opposed the austerity measures imposed by the Troika..

Greece fell into recession in the finanicial crisis of 2008.

The EU and the IMF provided €110 billion ($124.8 billion) in bailout loans to Greece to help the government pay its creditors in 2010. A second €130 billion ($147.5 billion) bailout was provided in 2012.

Most of Greece's private-sector creditors agreed then to restructure about three-quarters of the debts owed by Athens and to replace existing loans with new loans at a lower interest rate.

The years of austerity imposed by the bailout programs have soured sentiment against the previous coalition government of the New Democracy and Panhellenic Socialist Movement political parties. That government was obliged to cut wages and social services, increase taxes and lay off public sector workers.

Copyright © 2015 Anadolu Agency