German vice-chancellor urges debt relief for Greece

BERLIN: German Vice-Chancellor Sigmar Gabriel urged euro zone finance ministers to start talks on debt relief for Greece, saying it made no sense to crush the green shoots of economic recovery with further austerity measures.

The finance ministers of the euro zone’s 19 countries are due to meet in Brussels tomorrow to discuss Greece’s debt and a new set of contingency measures that Athens should adopt to ensure it will achieve agreed fiscal targets in 2018.

“The euro group meeting on Monday must find a way to break the vicious circle,” Gabriel, who is also Economy Minister, said in an emailed statement to Reuters on Saturday.

“Everyone knows that this debt relief will have to come at some point. It makes no sense to shirk from that time and time again,” he added.

The International Monetary Fund wants Greece’s European partners to grant Athens substantial relief on its debt, which it sees as vital for its long term sustainability.

But Germany’s hardline Finance Minister Wolfgang Schaeuble opposes any debt relief, arguing it is not necessary.

Thrice-bailed-out Greece needs to secure an overdue aid payment of 5 billion euros to repay IMF loans, bonds held by the European Central Bank maturing in July, and growing state arrears.

“It doesn’t help the people and the country to have to fight every 12 months to get new credit to pay off old loans,” the vice chancellor said.

“Greece needs debt relief,” he said.

Gabriel spoke out against further austerity measures and said Athens had managed to achieve better economic growth than expected.

“It makes no sense to destroy these tender shoots once again with new austerity measures,” he added. – Reuters