Germany Denies Preparing Greek Debt Relief Plan

Αssociated press

German Finance Minister Wolfgang Schaeuble. (AP Photo/Virginia Mayo, File)

Greek Prime Minister Alexis Tsipras’ hope for debt relief as a trade-off for agreeing to more harsh austerity measures demanded by international creditors hit a roadblock with reports that Germany - the biggest contributor to 326 billion euros ($358.52 billion) is going to back him.

Tsipras has told his Radical Left SYRIZA lawmakers and his coalition partners the pro-austerity, far-right, marginal, jingoistic Independent Greeks (ANEL) that he agreed to the tough terms he philosophically opposes and campaigned against because it would bring lower interest rates and a longer time to repay the monies, even if not an outright cut in how much is owed.

The German Finance Ministry denied the report and said that, “no such measures are being prepared” to bring Greece a debt cut.

The mass circulation German financial daily had attributed its report on sources within the ministry who claimed to have seen a relevant document.

The German ministry said Finance Minister Wolfgang Schaeuble is convinced that a May 22 Eurogroup session can wrap up Greece’s agreed-to deal with the Troika and his country.

The ministry also denied that serve as the venue where the second review of the Greek program can be conclusively achieved.

But the ministry added that, "implementation of reforms that Greece has agreed to, in exchange for assistance, will help in ensuring the sustainability of the Greek debt ...  as far as the measures for the debt, we reached a clear agreement at the May  2016 Eurogroup. Based on this agreement, only after the full implementation of the adjustment program will there be a review on whether measures for the debt are necessary."

Tsipras had told his Cabinet that, "without a solution to the debt, there are no measures,” although it could mean there would also be no more bailout monies if he doesn’t go ahead with the agreed reforms.

Tsipras has support from the International Monetary Fund (IMF) for debt relief from the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) which made him buckle and agree to more pension cuts in 2019 and taxing low-income families in return for the release of more monies from a third rescue package of 86 billion euros ($94.58 billion) he sought after saying he wouldn’t because it came with more austerity he campaigned against but them imposed – blaming the creditors and saying he had no choice.

The IMF took part in two first rescue packages of 240 billion euros ($263.94 billion) but has stayed out of the third so far until Tspiras to even more harsh measures although he said he would renege on the Troika deal unless Greece gets a debt break in some form.

With SYRIZA being crushed in the polls by the rival New Democracy Conservatives, Tsipras is eager for some kind of political victory and has set his sights on it being a debt break for austerity-crunched Greeks who have turned on him.