Schaeuble snubs debt relief for Greece

8 March 2016
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German Finance Minister Wolfgang Schaeuble warned Tuesday he opposed debt relief for Greece, a day after eurozone ministers agreed to consider the possibility in upcoming bailout talks.

“I honestly have no good argument to present German lawmakers or the German public opinion to whom I have a budgetary responsibility,” said Schaeuble, who is the most influential member of the Eurogroup of eurozone finance ministers.

Speaking to journalists after talks with his EU counterparts, Schaeuble said that any discussion of Greek debt relief would be “about prestige, not substance”.

However he acknowledged the debate was now opened, but that Germany, the EUs biggest economy, had “good arguments” against easing Greece’s debt burden, which has already been reduced twice since the start of the debt crisis.

Last July, Greek Prime Minister Alexis Tsipras secured Greece’s third bailout in five years, worth 86 billion euros ($95 billion), but only in return of deep reforms.

However, in one of the few concessions handed to Greece, eurozone leaders agreed to also debate debt relief once key reforms pledges were met.

Eurogroup chief Jeroen Dijsselbloem on Monday said Greece had made enough headway in its reforms to soon begin that discussion.

Debt relief is a also a key demand of the IMF, which believes no economic program would be credible without it.

Complicating matters, Schaeuble and other eurozone hardliners firmly back the idea that the pro-austerity IMF take part in Greece’s current bailout.

The EU forecasts that Greece’s debt will soar to 185 percent of gross domestic product (GDP) in 2016 – a level generally understood to be unsustainable.

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