German Chancellor Angela Merkel and her Finance Minister Wolfgang Schaeuble have underlined their opposition to a new Greek haircut immediately after German general elections in September but have indicated that further support for Greece could be on the cards in 2014.
In an interview with the Maerkische Oderzeitung and Sudwest Presse, Merkel stressed that she did “not see” the possibility of a new haircut for Greek debt, emphasizing however that the German government supported Greece’s difficult economic reform effort.
According to Merkel, a second haircut for Greek debt would be a multi-billion-euro burden for eurozone partners.
Schaeuble struck a similar note in an interview with German mass daily Bild, describing last year’s write-down of Greek debt as “a one off.”
“Whoever questions this must realize what they are doing,” he said. “No investor would put money into European state bonds,” he warned, adding that eurozone finance ministers would next year examine the possibility of extending further aid to Greece.
Schaeuble added that the Greek economic reform program has been designed to allow Greece to begin servicing its debt independently by 2020. “Until then the government in Greece must honor its commitments. Noone else can undertake Greece’s obligations,” Schaeuble said. “I know how hard it is for the people,” he added.