Merkel urged to come clean on Greek debt relief

BERLIN Thu Jun 6, 2013 10:20am EDT

Deputy Carsten Schneider of the opposition Social Democratic Party (SPD) speaks during a debate about the federal budget in the Bundestag lower house of parliament in Berlin, November 23, 2010. REUTERS/Thomas Peter

Deputy Carsten Schneider of the opposition Social Democratic Party (SPD) speaks during a debate about the federal budget in the Bundestag lower house of parliament in Berlin, November 23, 2010.

Credit: Reuters/Thomas Peter

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BERLIN (Reuters) - Germany's opposition Social Democrats demanded that Chancellor Angela Merkel come clean about the risk of losses on government loans to Greece before a looming election, after the IMF said Athens may require additional debt relief as early as next year.

Carsten Schneider, budget expert for the SPD in parliament, accused Merkel and her Finance Minister Wolfgang Schaeuble of being dishonest with voters by trying to push back a discussion of Germany's exposure to Greece until after the September 22 vote.

His comments on Thursday came a day after IMF economist Paul Thomsen said European governments had committed to providing more debt relief if Greece's primary budget balance fell short of target in 2013 or 2014.

"The chancellor and the finance minister need to stop leaving the public in the dark about the fact that after the election there will have to be official debt forgiveness for Greece," Schneider said.

"The Chancellor has said Greece should stay in the euro. Now she has to say what this promise will cost. The truth must come out before the election."

Private owners of Greek debt were forced to take losses on their holdings last year, but European governments and the European Central Bank have refused to take a so-called "haircut" on the debt they hold.

Germany has insisted a writedown of Greek debt held by euro zone governments would be illegal, although Schaeuble hinted late last year that objections to such losses might be dropped if Greece achieved a primary surplus.

(Reporting by Noah Barkin; Editing by Stephen Brown)

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Comments (3)
EthicsIntl wrote:
All holders of Greek debt should have their heads shaven clean. They deserve it when they demanded such outrageous interest rates and are greedy & stupid enough to buy trashy bonds from the likes of Goldman Sachs who is the real criminal behind all of EUrope’s economic predicament.

Jun 06, 2013 12:28pm EDT  --  Report as abuse
dareconomics wrote:
The German opposition, the SPD, is attempting to make hay out of the fact that the Greeks will require debt forgiveness after German elections. While this is true and German voters will be outraged when this goes down in the winter, the SPD supports this policy, too. In fact, the Socialists will be more than happy to expend even more money to keep the euro together. This is the type of stupid move that the challenger makes on his way to losing an election to an incumbent.

Full post with charts, images and links:

http://dareconomics.wordpress.com/2013/06/06/around-the-globe-06-06-2013/

Jun 06, 2013 1:57pm EDT  --  Report as abuse
ALALAYIIIAAAA wrote:
ETHICSINTL@
I Knew that greeks had borrowed at high rates i din’t know how high was the rate.When i read that they had sell bonds with 22,5% iterest
i realised why the greek citizens are so angry with their creditors as well as their politicians

Jun 07, 2013 4:01am EDT  --  Report as abuse
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