Greece crisis: Angela Merkel rules out any debt cancellation

German Chancellor Angela Merkel has ruled out canceling any of Greece’s debt, saying banks and creditors have already made substantial cuts.

However, Angela Merkel told the Hamburger Abendblatt newspaper she still wanted Greece to stay in the eurozone.

Greece’s left-wing Syriza party won last weekend’s election with a pledge to have half the debt written off.

Its finance minister said the “troika” of global institutions overseeing Greek debt was a “rotten committee”.

The troika – the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) – had agreed a €240 billion ($270 billion) bailout with the previous Greek government.

Greece’s new Finance Minister Yanis Varoufakis has refused to work with the troika to renegotiate the bailout terms and has already begun to roll back the austerity measures the creditors had demanded of the previous government.

Angela Merkel told the Hamburger Abendblatt: “I do not envisage fresh debt cancellation.”

She said: “There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece’s debt.”

Greece still has a debt of €315 billion ($355 billion) – about 175% of gross domestic product – despite some creditors writing down debts in a renegotiation in 2012.

Angela Merkel insisted she did not want Greece to leave the eurozone.

She said: “The aim of our policy was and is that Greece remains permanently part of the euro community. 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.”

On January 30, German Finance Minister Wolfgang Schaeuble warned Greece about its negotiation tactics on writing off debt.

“There’s no arguing with us about this, and what’s more we are difficult to blackmail,” he said.

Finance Minister Yanis Varoufakis refused to work with the troika, saying he would instead talk to individual organizations and EU member states.

Yanis Varoufakis has brought forward to Saturday his planned trip to Paris, where he will meet French counterpart Michel Sapin.

Greece’s current program of loans ends on February 28. A final bailout tranche of €7.2 billion still has to be negotiated.

New Greek Prime Minister Alexis Tsipras will visit Cyprus, Italy and France next week but has no plans to visit Germany as yet.

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