Merkel does not rule out future Greek ‘haircut’

BERLIN - Agence France-Presse

Angela Merkel casts a vote at the German federal parliament, Bundestag.

German Chancellor Angela Merkel yesterday did not rule out a so-called “haircut”, or write-down, of Greek debt in the next few years, marking an apparent softening in position. After being vehemently opposed to accepting a “haircut”, Merkel said in an interview with the Bild am Sonntag weekly that it could be considered from 2014 if Athens’ financial situation improves.

“If Greece can get by on its income one day again without taking on new debt, then we must look at and assess the situation. That won’t be the case before 2014/15 if everything goes according to plan,” she told the paper.

Opposition politicians have accused Merkel of playing down the need for a write-down of Greek debt holdings by public institutions such as other eurozone governments and the European Central Bank because of federal elections expected to take place on September 22, 2013.

In the Bild interview, Merkel contested the charge that she had refused a “haircut” because of the looming elections. “The current aid program for Greece runs until 2014. For the achievement of certain budgetary goals we have given the Greeks two years more time until 2016,” she said.