Berlin Insists on Strict Conditions for Greek Debt Relief



German Finance Minister Olaf Scholz

Debt relief for Greece will only be provided under strict conditions if it happens at all, Germany‘s finance ministry has said.

Earlier, German newspaper Handelsblatt reported that Berlin was opposed to granting debt relief without strict conditions. The financial newspaper cites German finance ministry documents.

According to Handelsblatt, the finance ministry says that low growth will not automatically entitle Greece for reduced debt service payments.

At the same time, the conditions would include that Greece must stick to the jointly agreed budget rules of the eurozone.

“No decisions have been made, there is no predetermination in these questions,” finance ministry spokeswoman Jeanette Schwamberger told Reuters.

Talks about easing the Greek debt continue with Athens hoping that a decision will be made before the bailout program ends in August. However, Schwamberger said: “This decision will certainly take a few more weeks.”

The Greek government is speaking of a “clean exit” from the bailout program. However, unless the debt relief issue is resolved, it will be difficult to set an economic policy.

Creditors, and the International Monetary Fund in particular, have stressed that a debt-easing program should be connected to growth goals so that the country will continue with the needed reforms and a prudent fiscal policy.

Handelsblatt said German Finance Minister Olaf Scholz was against a proposal to grant debt relief for Greece if its economic growth should drop below a certain level.