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German FinMin: Debt Easing Would Abate Greece's Willingness to Reform

Wolfgang-Schaeuble2German Finance Minister Wolfgang Schaeuble reiterated his position that Greek debt relief would abate the country’s willingness to implement economic reforms.
According to a Wall Street Journal report, Schaeuble spoke during a book presentation where he referred to Greece’s call for immediate and substantial debt relief.
Schaeuble said that Greece’s problem is not the debt itself. “We understand that the problem of Greece is not the high amount of the debt, but the lack of competitiveness and the inability to establish a (functional) administration.”
“We all pretend that some form of debt relief in Greece will make things better,” he said and concluded:
“The only thing that (debt relief) would change is to abate even more any desire to deal with reforms,” Schaeuble commented.
Berlin is reluctant to make decisions on Greece’s debt relief, even if it applied after the end of the bailout program in 2018, as decided by the Eurogroup in May. This is because German elections will be held in autumn 2017 and the majority of the German public is against forgiving part of Greece’s debt
Behind the scenes negotiations between all parties involved are in progress in order to find a compromise formula that would satisfy Berlin and at the same time allow the International Monetary Fund to stay in the bailout program.
So far, IMF calls for immediate and substantial debt relief for Greece, a position that is contrary to the country’s European creditors.

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