ECONOMY

European leaders sidestep debt debate in Greece talks

European leaders meeting in Brussels carefully sidestepped the thorny question of restructuring Greeces huge debt on Monday, with Germany the most reluctant to open the debate.

“This is not an urgent question,” Europe’s most powerful leader Chancellor Angela Merkel said in response to a question on Greece’s debt pile, which stands at a towering 180 percent of GDP, almost double the annual output of the national economy.

Bailout fatigued Germany is very reluctant to address the debt issue, and after the summit Merkel said the question “was not open for debate”, even though many economists believe the debt is unsustainable and the subject inevitable.

Her comment came after a Monday summit where eurozone leaders said they hoped to finally seal a Greek bailout deal this week to save Athens from default and a possible exit from the euro.

European Commission head Jean-Claude Juncker, a key broker in the talks, said it “wasn’t the time to discuss” the thorny debt question.

France was also reluctant to raise the topic, at least publicly, concerned that feathers would be ruffled in Berlin, putting any deal with Athens in jeopardy.

“Extending repayment deadlines or restructuring the debt, this can only come at second stage,” French President Francois Hollande told reporters.

“The debt subject is not in the discussion (for now)… but it must be signalled to be raised later,” after a short-term deal with Athens, he added.

The Greek prime minister has made the renegotiating of Greece’s debt a central part of his effort to revisit Greece’s 240 billion euro bailout, the second since 2010.

Alexis Tsipras on Monday again said that Greece deserved a “viable debt” and that it should be part of any deal to unlock vital bailout cash in return for reforms.

[AFP]