• Germany's news in English
 

Berlin firmly against debt 'haircut' for Greece

Published: 26 Nov 2012 12:36 GMT+01:00

"We are going into this meeting with the hope that a solution can be found to all outstanding questions," government spokesman Steffen Seibert told reporters at a regular news conference.

Later on Monday, eurozone ministers will attempt for the third time to clinch agreement on unfreezing a vital instalment of bailout aid worth about €31.2 billion as Greece stares again into the bankruptcy abyss.

But Seibert stressed again Berlin's opposition to a so-called "haircut" on Greece's debt - meaning that other eurozone governments and the European Central Bank would accept a write-down on the debt they currently hold.

"This official sector haircut is also not a topic for other countries in the eurozone. That's why the finance ministers will not be talking about it. It's also not a topic for the ECB," insisted Seibert.

Greece's private creditors have written off more than €100 billion in debt, and the IMF has urged the ECB, a public creditor, as well as other eurozone governments, to accept this solution.

With less than a year until elections, Germany is unwilling to take losses on its holdings of Greek debt and the ECB believes it is tantamount to monetary financing of a eurozone country - strictly forbidden by its founding treaty.

Seibert also pointed to legal complications."It is true that there are significant political objections to such a haircut. But above all, there are clear legal objections and not just in Germany," he said.

He noted that German budgetary law as well as EU laws stating that no country may bail out another stood in the way of a haircut.

Politically, he said that if Greece were granted a haircut, then other countries under an EU bailout programme might also want one.

AFP/jlb

The Local (news@thelocal.de)

Your comments about this article

14:44 November 26, 2012 by Berlin fuer alles
What loan shark ever does accept a debt reduction from their victim?
20:49 November 26, 2012 by axlathi
Germany needs to stop living in denial - one way or the other, fair or not, they're going to have to foot a good portion of the bill. But the fact of the matter is, Germany has benefitted hugely from the EU and the euro, not least because a large amount of the debt incurred by countries like Greece was spent on German goods, and paying to help the euro zone extricate itself from the crisis, and stop acting as a brake on the world economy (and therefore German exports) is ultimately an investment in Germany's own future prosperity, especially given that the PIGS have been forced to enact reforms that will make them much more productive and potentially successful economies and societies moving forward. Alas they have waited a little too long to also reap the PR benefits of being saving Europe in its moment of need, which would have been a nice change given its reputation in the first half of the last century.
23:50 November 26, 2012 by Berlin fuer alles
You are right axiathi but Germany is doing what any loan shark does. Cutting off some limbs of the poor debtor in order to extract what is owed is an age old practice of loan sharks. Greece's balls are in a jar and Germany insists on kicking them everytime Greece is slow to repay the unsustainable debt Germany persuaded it to take out. Common practice from common criminals masquerading as elected representatives.
14:45 November 28, 2012 by raandy
If they do not write the debt down and keep loaning only to allow Greece to restructure it's debt, then they are only kicking the proverbial can down the road.

Christine Lagrade has hit out at EU need to write off some of Greece's debt to make it manageable. This has put her at odds with Chancellor Merkel who is facing reelection this coming September.

I would assume after the election the Chancellor would be more in favor of the so called hair cut.
Today's headlines
Wolf spotted in North Rhine-Westphalia
File photo: DPA

Wolf spotted in North Rhine-Westphalia

Camera traps have spotted a wolf for the second time in a month in North Rhine-Westphalia, the state environment ministry reported on Friday. READ  

German ranchers murdered in Paraguay
Paraguayan police on patrol in an area known to contain EPP rebels. File photo: DPA

German ranchers murdered in Paraguay

The Foreign Ministry in Berlin confirmed that two Germans living in Paraguay were kidnapped and killed earlier this week. READ  

AfD braces for busy conference weekend
"Vote AfD!" reads the flyover message. Photo: DPA

AfD braces for busy conference weekend

As leaders of the Germany's anti-Euro upstart party Alternative for Germany (AfD) prepare for its party conference this weekend, the potential for chaos is rising. READ  

Sudden dose of winter causes traffic chaos
Snow in Oberharz. Photo: DPA

Sudden dose of winter causes traffic chaos

UPDATE: Two people were rescued from avalanches as a blast of winter has taken Germany by surprise, while snow and ice accounted for several traffic accidents across the country on Friday. READ  

BND collects 220 million phone records a day
Photo: DPA

BND collects 220 million phone records a day

Germany's foreign intelligence agency, the Bundesnachrichtendienst (BND) collects 220 million pieces of information about foreign phone calls and SMS every day, Zeit Online reported on Friday. READ  

U-turn on minimum wage for foreign drivers
Photo: DPA

U-turn on minimum wage for foreign drivers

Germany temporarily hit the brakes Friday on applying its new minimum wage to foreign truck drivers transiting the country in a move welcomed by Poland, which vigorously opposed the system. READ  

Crises make Germany EU foreign policy leader
Foreign Minister Frank-Walter Steinmeier. Photo: DPA

Crises make Germany EU foreign policy leader

Foreign policy think-tank the European Council on Foreign Relations (ECFR) gave Germany top marks in its annual check-up of EU member states released on Thursday. READ  

Prost! Beer sales hop up for first gain in 8 years
Photo: DPA

Prost! Beer sales hop up for first gain in 8 years

New figures released Friday by federal statistics office Destatis are numbers breweries can drink to, as German beer consumption saw its first year-on-year rise since 2006. READ  

Germany has thousands of uni spots open
Photo: DPA

Germany has thousands of uni spots open

New research published by Spiegel on Friday shows that there are thousands of university placesa unoccupied across the country, while certain hot spots cope with too much demand. READ  

Borussia coach admits to 'downward spiral'
Borussia Dortmund coach Jürgen Klopp at a press conference. Photo: DPA

Borussia coach admits to 'downward spiral'

Borussia Dortmund coach Jürgen Klopp admits feeling the pressure as his side resume their fight to stay in Germany's top flight on Saturday at fellow Champions League side Bayer Leverkusen. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Business & Money
FATCA: 'The age of financial privacy is over'
Gallery
The best regional foods TTIP opponents want to protect
Photo: DPA
Features
The rise and spread of Pegida
Photo: Shutterstock
Culture
This cosplayer did not think his plan through
National
Europe in statistics - from Spain to Sweden
Photo: DPA
Politics
The Local's report from Pegida's largest ever demonstration.
Sponsored Article
Top-notch tech boosts bilingual schools
National
Six stories that will rock Germany this year
Photo: DPA
National
Terror alert at a new high. Should you be worried?
Dresden skyline and river by night. Photo: DPA
Politics
What does Dresden have against Muslims?
Photo: DPA
National
What were your favourite news stories of 2014?
Gallery
Top 12 German idioms
National
Why has The Local got a new logo?
Photo: DPA
National
This German was abducted and tortured by the CIA
Culture
10 top tips for partying in Germany
Photo: DPA
Technology
What does the Chancellor see as the future of the internet?
Photo: DPA
Berlin
The Local's series on 25 years since the fall of the Berlin Wall
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,955
jobs available
Toytown Germany
Germany's English-speaking crowd