She said that under no circumstances could there be a new “classic haircut” of Greek debt, similar to what happened with the PSI.
“A debt cut in the classic sense is forbidden by the rules of the Euro, it cannot be done within the eurozone,” said Merkel in a interview with German public radio (Deutschlandfunk / DLF) and the TV program Phoenix of public broadcasting networks ARD and ZDF.
She pointed out that Greece has already received debt relief and she added that if more is needed, it will be discussed in 2018 or 2019, when the current bailout programme for Greece expires.
The German Chancellor defended her policy on Greece and the imposition of reforms as a condition for further aid.
Greece, she said, has agreed to make tough reforms and will, hopefully, honor its commitments.
“Excessive leniency does not help the heavily indebted countries and that’s why Greece was dealt harshly… The country was greatly tested”.
Merkel used the example of Spain and Ireland, which, as she noted, have managed to return to the path of growth following tough reform programs.