BERLIN (Reuters) - The German government is looking at whether the European Union could provide guarantees for Greek debt to the International Monetary Fund (IMF) in order to keep the Fund on board and avoid the need for major debt relief, German weekly Die Zeit reported.
Without citing its sources, the paper reported on Wednesday that the idea meant that “if Greece ran out of money, the Europeans would jump in and the IMF would suffer no losses. In return, the Fund would no longer demand extensive debt relief.”
The plan would thus fulfil two key demands made by German Chancellor Angela Merkel - keeping the IMF involved and avoiding a debt writedown.
Reporting by Madeline Chambers and Noah Barkin; Editing by Caroline Copley