Politico.eu — Greece must not be given “bail in” conditions to write off debt in any future agreement with creditors, Germany’s Deputy Finance Minister Jens Spahn said today.
Speaking with broadcaster Deutschlandfunk, he said: “We think it is very, very likely that we will come to an agreement with the International Monetary Fund that does not require a haircut,” referring to losses that Greece’s creditors would have to take if debt was written off, reported Reuters.
The IMF wants to grant substantial debt relief, but Germany, the largest contributor to the eurozone bailout fund, the European Stability Mechanism (ESM), does not.
Spahn argued that if such measures were given to Greece then why not other countries too? “Our Spanish friends, for example, say: ‘Hang on – that wouldn’t be fair: we carry out reforms and get no haircut and now you’re talking about giving Greece one?!’,” he told the broadcaster.
Berlin’s official line is that if the IMF pulled out, the bailout would end, since Chancellor Angela Merkel wanted to ensure that the Greek bailouts didn’t fall victim to the EU’s lax fiscal oversight.
The Merkel government officials say they worry a rescue without the Fund’s involvement could be rejected by the Bundestag or hurt the center-right in the campaign for September’s parliamentary elections.
