Debt cut for Greece not on agenda for now

BERLIN: Greece must press ahead with implementing its reforms-foraid programme and become more competitive, German Finance Minister Wolfgang Schaeuble was quoted as saying, adding that debt relief for Athens was ‘currently’ not on the agenda.

Euro zone finance ministers and the International Monetary Fund reached an agreement on Greece in June, paving the way for new emergency loans for Athens while leaving the contentious issue of debt relief for later.

Asked in an interview with the newspaper Mannheimer Morgen if he could envisage a partial cut in debt for Greece, Schaeuble said, “That’s currently not on the agenda at all.”

Chancellor Angela Merkel and Schaeuble do not want to discuss any details of debt relief for Greece before federal elections on Sept 24, in which the far-right euro-sceptic AfD party is forecast to enter parliament for the first time.

Starting a discussion about debt relief would send the wrong signal to Athens at a time when the economy was doing better and recovering, Schaeuble told Mannheimer Morgen. “The country doesn’t need a debt cut now, but it must continually work on its competitiveness,” Schaeuble said.

He pointed out that Greece’s borrowing costs for the next 10 to 15 years were already relatively low.

“Above all, as long as member states are responsible for financial and economic policy, they must also bear the consequences of their own decisions themselves”, he said.

Schaeuble, whose insistence on reforms to public finances in Athens have long made him a hate figure for many Greeks, has signalled his readiness to deepen euro zone integration as long as risks and liabilities arising from political decisions remain linked .

Merkel’s conservative Christian Democrats are leading the centre-left Social Democrats by about 15 percentage points in opinion polls and are the heavy favourites to retain power after the election.

Schaeuble, who has been finance minister since 2009 and will turn 75 on Sept 18, has signalled his willingness to continue as finance minister. But Merkel could be forced to sacrifice him to secure a coalition deal. —