Thursday

25th Feb 2021

Merkel hints at future 'haircut' on Greek debt

  • Merkel - Governments may in the future take a writedown on Greek debt, but not yet (Photo: ec.europa.eu)

German Chancellor Angela Merkel admitted Sunday that governments will likely have to take a loss on the Greek debt they own, breaking what was considered a taboo in German politics.

Choosing the influential mass-selling tabloid Bild am Sonntag to make the admission, Merkel said in two years time a "haircut" should be considered for Greece.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"If Greece one day again manages with its revenue without getting new debt, then we must look at and assess the situation," she said. "That is not the case before 2014-15 if everything goes according to plan."

The statement represents a significant shift for Berlin which has until now avoided entering the politically risky territory of saying that taxpayers will be affected by Greece's debt problems.

Germany itself will hold federal elections in autumn next year but Merkel denied that the two year timeframe for giving Athens further debt relief had anything to do with the German ballot box.

Taking on her critics she said that forcing Greece to leave the eurozone would cost "much more money" that bailing it out. “We need to avoid all this uncertainty.”

The Bild interview came as critics at home have increasingly been accusing the chancellor of hiding the full cost of the Greek bailout.

The German parliament Friday passed the latest eurozone deal to give Greece a two-year extension on its aid programme and another tranche (€44bn) of bailout money.

However, in a reminder that not everyone is happy about her handling of the Greek situation, 23 MPs from her governing coalition voted against the move. The rebels denied Merkel the symbolically important absolute majority within her own ranks.

Meanwhile Eurozone finance ministers will Monday (3 December) discuss details of a bond buyback scheme, a central part last week's deal on Greece.

The scheme to buy back debt from private investors opened early on Monday morning and will run until 7 December. Greek Finance minister Yannis Stournaras is to present details to his colleagues in the evening.

Under the deal, holders of Greek debt will be given the chance to swap their bonds for up to €10bn of six-month bills, the Greek finance ministry said in a statement early Monday morning.

Interview

Adenauer grandson challenges Merkel on euro-policy

Angela Merkel's Christian Democratic Union is gathering this week in Hannover for a party congress, but the descendent of CDU founder Konrad Adenauer will not be among them.

Greek opposition leader 'vindicated' by IMF

Greek opposition leader Alexis Tsipras feels "vindicated" by the IMF's recent change of tone on austerity, he told this website ahead of a meeting with the German finance minister.

News in Brief

  1. Armenian prime minister denounces 'coup' attempt
  2. UK warns EU against escalating City-of-London battle
  3. Brussels mulls extending data-roaming regime for 10 years
  4. Full list of European firms US forced to ditch Russia pipeline
  5. French diplomat calls Johnson 'inveterate liar'
  6. French town's switch to vegetarian meals prompts backlash
  7. Police seize 23 tonnes of cocaine in Europe's biggest haul
  8. WHO Covax programme delivers first vaccines to Ghana

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  2. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  3. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  4. Nordic Council of MinistersWomen benefit in the digitalised labour market
  5. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  6. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!

Latest News

  1. Who are the EU's new Russian deplorables?
  2. Afghan asylum family beaten in Greece, set adrift at sea
  3. EU leaders face Covid-mutations dilemma at summit
  4. EU sets out plan to mitigate 'unavoidable' climate events
  5. Questions for Germany on EU's Russia strategy
  6. Greenland's snap election exposes global mineral demand
  7. Covid-19 certificates back on EU leaders' agenda
  8. Ethiopia war creating new 'refugee crisis', EU envoy warns

Join EUobserver

Support quality EU news

Join us