No debt haircut for Greece but bailout extension an option, says Germany

The German government stuck to its view on Monday that a third haircut, or debt restructuring, for Greece was out of the question but opened the door to a possible extension of Greece’s current bailout programme.

“That’s certainly a possibility or an option and, as I said, we’ll go into every discussion constructively … As always, it depends on how such a request is formulated and on the overall context, but in principle that is an option,» German finance ministry spokeswoman Marianne Kothe said at a news conference.

Greek anti-bailout leftist party Syriza swept to victory in a snap election on Sunday, with leader Alexis Tsipras promising that five years of austerity, «humiliation and suffering» imposed by international creditors were over.

German government spokesman Steffen Seibert said Berlin would offer the future Greek government its cooperation but said the new government needed to build on the «remarkable» progress the country had already made.

“From our point of view it’s important that the new Greek government takes measures so the economic recovery of Greece continues and that includes Greece sticking to the commitments it has made,» he said.

He added that the basis of cooperation remained European solidarity combined with Greece’s own efforts and stressed that the plan was for Greece to remain a member of the euro zone.

“Since the start of the crisis it has been the German government’s intention and aim to stabilise and strengthen the whole euro zone, with all of its members, and that of course that includes Greece. That remains the aim of our work.”

Seibert said German Chancellor Angela Merkel had not yet spoken to Tsipras but would congratulate him when he was sworn in as prime minister.