Germany opposes long-term interest guarantees for Greece

14 May 2016
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German Finance Minister Wolfgang Schaueble does not want to provide debt relief to Greece through long-term interest rate guarantees, according to an unsourced report published on Friday in the German newsmagazine Der Spiegel.

Schaeuble has rejected a proposal from the euro bailout fund to cap interest rates on Greek debt at 2 percent until 2020, regardless of how debt develops with credit market trends, according to the weekly.

However, the minister is open to discussing longer debt payment schedules, lower interest rates and deferred payments, but only in 2018 when the Greek reform package is completed, the magazine reported. The ministry declined comment on the report.

At the start of the week, euro zone finance ministers had agreed to try and reach a final agreement about Greek debt relief when they meet again on May 24 to discuss a review of Greek financial reform by the International Monetary Fund (IMF), European Central Bank and European Commission.

Depending on the outcome of the discussions, up to 86 billion euros ($97.15 billion) from the third bailout package could be transferred to Greece. The ministers also agreed on the possibility of relief for Greek debts in excess of 300 billion euros, should this be necessary.

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