Angela Merkel open to Greek debt haircut

Ben Southwood
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GERMAN Chancellor Angela Merkel yesterday said the Eurozone powerhouse would be willing to consider forgiving some Greek debt, if the troubled country brought its budget into surplus.

But even if everything went to plan, Greece wouldn’t be turning a surplus until at least 2014-5, Merkel pointed out, leading opposition politicians to accuse the chancellor of playing down Greek debt concerns to boost her party’s chances in next year’s federal elections.

But Merkel disputed these claims in the interview with German newspaper Bild am Sonntag, and her turnaround on the idea of a debt haircut follows hints from her finance minister Wolfgang Schäuble that some debt forgiveness may be inevitable. This comes after the German parliament on Friday approved the package of rate cuts and extended loan periods that Greek politicians wrangled out of its creditors.