Too early to decide, says Merkel
German chancellor wants details on Greek progress; ECB official in favor of providing more time
Speculating on whether or not Athens can repay its debts does not help Greece, German Chancellor Angela Merkel said yesterday.
“We don’t do Greece any favors if we speculate” on the outcome of reforms and how the country will manage its public debt, Merkel told a press conference in Berlin.
European Union, European Central Bank and International Monetary Fund auditors are currently involved in a quarterly re- view of the Greek reform drive amid worries that Athens could default on its debt or ask for it to be restructured, thereby impacting the entire eurozone.
“The mission is still in Greece. It is my understanding they will be there until the end of the week. Therefore I’m waiting on the findings of this mission,” Merkel said.
“I am of the opinion that the conclusions to be drawn from the findings must await the findings,” the German chancellor added when asked if Berlin was prepared to agree to additional aid for Greece.
A bailout package for Greece, put in place a year ago, currently involves international loans of 110 billion euros over three years.
Senior EU and Greek officials have denied that any restructuring of the debt is on the agenda.
European Central Bank policymaker Ewald Nowotny indicated yesterday he was in favor of giving Greece more time to repay its financial aid rather than issuing new loans. Nowotny said a Greek debt restructuring would damage both Greece and other countries in the 17-member eurozone.
“You have to be aware that this would immediately have massive consequences for the Greek banking system and for the banking system overall,” the ECB policymaker told Austrian radio. “That would only heighten the crisis.”
Nowotny said it was primarily up to Greece to put its financial house in order and that a restructuring must be avoided.
Asked whether Greece would get fresh loans, he said: “The first step has to be on Greece’s side. Only when we have a clear view here can we consider whether the existing program must be rounded out, but that is something one can judge only in the weeks ahead.”
Another ECB policymaker, Juergen Stark, said yesterday a debt restructuring wouldn’t solve Greece’s problems.