BERLIN – German Chancellor Angela Merkel held out the prospect of limited debt relief as crisis-ravaged Greece prepares to reopen its banks three weeks after they were shut.
Merkel told German broadcaster ARD that she’s prepared to discuss the matter once Greece successfully completes the first round of a new bailout. While the remarks don’t go beyond pledges already made by euro-region governments, they signal that the topic could be considered by the end of the year. She ruled out any haircut on Greek debt.
“When the first successful assessment of the program being negotiated now is completed, exactly this question will be discussed,” Merkel said Sunday. “Not now, but then.”
Merkel’s comments come after a week that saw Greece pull back from the brink of financial collapse. While the bailout agreed upon last weekend has split the government of Prime Minister Alexis Tsipras, it also cleared the European Central Bank to inject more funds into the country’s financial system.
That will allow banks to reopen Monday, although capital controls and limits on withdrawals remain in place. The daily cash withdrawal limit of 60 euros ($65) will be replaced by a weekly limit of 420 euros, while transfers abroad from Greek accounts remain banned. The Athens Stock Exchange will also stay closed, a spokeswoman said Sunday in a text message.
Further easing of repayment terms for Greek aid loans has been an option in euro-area negotiations since 2012. Ensuring that Greece’s debt is sustainable looms as one of the challenges when talks on the third bailout get underway.
Merkel defended Wolfgang Schaeuble, her finance minister, who breached a taboo last week by floating the idea of suspending Greece from the euro for five years. The proposal was meant to prevent a “catastrophic situation,” she said.
She deflected questions about a dispute with Schaeuble, who said in an interview with Der Spiegel published Saturday that the two had differences. Schaeuble said he’d quit if he were to conclude that he no longer had a say in Merkel’s government, adding that he wasn’t considering such a move.
“I’ve received no such request for a resignation, and I don’t have any intention of continuing this discussion,” Merkel said. “We have work to do.”
