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German chancellor Angela Merkel rules out debt reduction for Greece

  1. peteai

    3,024 Posts.

    I thought I'd start a new thread to focus on this
    I can see merit in the arguments of both sides - and so I don't see it as black and white
    e.g if 100 billion has been slashed from Greek debt, what about the debt of African nations ?? surely they are more deserving of deby forgiveness??
    - at least the Greek people got to see some of the money their govt borrowed,
    and will it be a precedent for Portugal, Spain, Italy ?

    On the other hand: is it is simply too big a burden for Greece ?

    Regardless I think Greece needs to develop its economy if it does not want to go into long term decline - and that will probably require international support if not finance... and there lies a conundrum
    - misuse of credit got it into this mess but will probably need a lot of outside finance/investment to develop its economy

    German chancellor Angela Merkel has rejected the prospect of debt relief for Athens, adding to tensions between the radical new Greek government and its international creditors.
    "There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Ms Merkel said in an interview with local newspaper Hamburger Abendblatt.
    "I do not envisage fresh debt cancellation," she said.
    The new Greek government has already begun to roll back years of austerity measures demanded by the EU and the International Monetary Fund in return for a 240 billion euro ($269 billion) bailout granted to avoid a financial meltdown in 2010, and says it will negotiate to halve the debt.
    At the start of 2012, Greece restructured its debt in a deal involving private creditors who took "haircuts" or wrote down parts of their holdings. This cut Greece's total debt burden by around 100 billion euros.
    But the country is today still lumbered with a debt pile of more than 315 billion euros, upwards of 175 per cent of gross domestic product (GDP), a record for the European Union.
    "Europe will continue to show its solidarity with Greece, as with other countries hard hit by the crisis if these countries carry out reforms and cost-saving measures," Merkel said.
    Greek prime minister Alexis Tsipras will visit Italy and France on Tuesday and Wednesday, but has no immediate plans to visit Germany, Europe's biggest economy and effective paymaster.

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