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Jul 19, 11:53 AM EDT

Merkel rules out 'haircut' for Greece, open to other relief


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BERLIN (AP) -- Chancellor Angela Merkel on Sunday suggested that Germany would show flexibility in negotiating how Greece deals with its massive debt, but again ruled out writing off part of the money.

Speaking on ARD television's Bericht aus Berlin program, Merkel said that "a classic haircut of 30, 40 percent of debt cannot happen in a currency union."

But Merkel, who persuaded German lawmakers on Friday to give their overwhelming backing to another financial rescue package, suggested that she was open to discussing ways to lessen the burden on Athens.

She said, for example, Greece previously has been given more favorable interest rates, time extensions and other relief

"We can talk about such things again," she said, but added such talks could only begin after details of Greece's bailout program are finalized.

Though the broad outlines of the Greek bailout were agreed last Monday by the eurozone's 19 leaders, the details are now being negotiated.

The discussions, which are expected to last four weeks, will include economic targets and reforms deemed necessary in return for an anticipated 85 billion euros ($93 billion) over three years.

Merkel pushed for them to move as quickly as possible, saying that it was important that "the country gets back on both feet quickly."

Asked about Finance Minister Wolfgang Schaeuble's suggestion last week that Greece could take a five-year "timeout" from the shared euro currency to address its economic problems, Merkel said the idea of a "Grexit" was no longer on the table.

"The option was discussed but we decided on this option, which was quite apparently the right one for all the other" eurozone nations, she said.

Talking to Parliament on Friday, Merkel said the alternative to the new rescue package "would not be a time-out from the euro that would be orderly ... but predictable chaos."

German Vice Chancellor Sigmar Gabriel, who is also economy minister and chairman of Merkel's junior coalition partner, the Social Democrats, on Sunday criticized Schaeuble for bringing up the idea of a timeout, saying "it wasn't prudent to make this suggestion as a German suggestion."

He suggested there was a disconnect between Merkel and Schaeuble, but the finance minister downplayed any differences, saying in a Der Spiegel interview "we're not always of the same opinion but we're on the same path."

Merkel skirted the issue when asked about internal strife, saying only that her coalition and her party would work together going ahead, and that "the finance minister will conduct the negotiations the same way I will."

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