German chancellor Angela Merkel reiterated her opposition to debt relief for Greece in an interview with the Hamburger Abendblatt on Saturday. “There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece’s debt,” she said. “I do not envisage fresh debt cancellation.”
Most of Greece’s privately-held debt was restructured in 2012. Greece now owes some 90 percent of its debt to official creditors, mainly other eurozone governments.
Merkel’s comments came a day after the Netherlands’ Jeroen Dijsselbloem, who chairs the meetings of eurozone finance ministers, urged Greece to stick to its commitments.
“Taking unilateral steps and ignoring previous arrangements is not the way forward,” Dijsselbloem said during a news conference with his new Greek counterpart, Yanis Varoufakis, in Brussels.
Separately, Wolfgang Schäuble, Germany’s finance minister, told Die Welt newspaper, “If I were a responsible Greek politician, I wouldn’t start a debate about debt reduction.”
A recent Emnid poll for N24 found that only 16 percent of Germans are in favor of forgiving Greek debt. An earlier ARD-Deutschlandtrend poll showed 68 percent against debt reductions. 43 percent of those surveyed by Emnid said they were opposed to making concessions to Greece at all.
Public opinion in the Netherlands, Europe’s sixth economy, is possibly even less compromising. The Euroskeptic Freedom Party, which advocates a Dutch withdrawal from the European Union, is the second-largest in the polls after Prime Minister Mark Rutte’s liberals. Past surveys have shown a majority of the Dutch would rather Greece left the euro.
But the new Greek prime minister, Alexis Tsipras, insists on debt relief. He told his cabinet earlier this week they could not disappoint voters who gave his far-left Syriza party a strong mandate to put an end to austerity.
“We are coming in to radically change the way that policies and administration are conducted in this country,” he said.
Syriza won the election on Sunday but fell two seats short of an outright majority. It entered into a coalition with the right-wing Independent Greeks who won thirteen seats. Both parties campaigned against the conditions of Greece’s bailouts and against the “troika” of European Central Bank, European Commission and International Monetary Fund experts who have supervised the implementation of budget cuts and economic reforms — and repeatedly found Greece lacking.
Greece has received €240 billion in financial support from other European Union countries and the International Monetary Fund since 2010.
Days after winning the election, Tsipras started rolling back some of the measures that aid was conditioned on, such as the privatization of Greece’s largest seaport and its public power utility. He also wants to cancel spending cuts and public-sector reforms earlier governments agreed to.
Varoufakis suggested on Friday he wanted nothing to do with the “troika” anymore, preferring to work directly with other European countries, perhaps assuming they would be more lenient. After Dijsselbloem’s frosty reaction, he walked back those comments Friday night, telling BBC’s Newsnight, “I’ve never said that we are not interested in discussing with our creditors, exactly the opposite, we are very keen to enter into fruitful negotiations and deliberations with the ECB, the IMF, the European Commission and every single member state of the eurozone to which we belong and rightfully find ourselves in.”