Germany open to debt relief for Greece, but no haircut, says deputy finance minister

Germany's deputy Finance Minister Jens Spahn told German radio on Thursday that Germany was ready to talk about debt relief for Greece, such as extending the maturity of loans or easing the terms, but a haircut was out of the question.

"A so-called haircut is not legal, where you give up some debt … but under the term debt relief you can also talk about extending maturities, having a period without making interest payments or redemption payments and we can talk about that, we have always said that," Spahn told Deutschlandfunk.

Spahn also played down any differences within the German government on a draft agreement between Greece and its creditors, saying the Berlin government was "pulling together" in getting a deal with Greece that fulfilled certain conditions.

"The whole German government .. acknowledges that the Greek government has shifted a good deal. There is a constructive attitude, a willingness to (undertake) reforms, there is a recognition that Greece must change if it wants to stay in the euro zone."

He said some outstanding questions, such as on privatizations and banking recapitalization had to be addressed this week and that it was important for Germany that the International Monetary Fund stayed involved in the process.

[Reuters]