News / Economy

Merkel Downplays Rumors of Second Greek Debt Writeoff

German Chancellor and top candidate of the Christian Democratic Union Angela Merkel makes a speech in the northern German town of Sankt Peter-Ording, July 19, 2013.
German Chancellor and top candidate of the Christian Democratic Union Angela Merkel makes a speech in the northern German town of Sankt Peter-Ording, July 19, 2013.
Selah Hennessy
— German Chancellor Angela Merkel has played down speculation that Greece could get a second debt writedown, saying that could destabilize the eurozone.  But some analysts say a debt writedown might be exactly what's needed to keep the euro zone on track to recovery. 

Merkel held the chancellor's annual summer news conference Friday, giving her an important opportunity to address the media just months before Germans vote in the September federal election.

Europe's ongoing debt crisis is a major campaign issue and Greece was one of the main topics.
 
Speaking to reporters, she repeated her view that she does not see a debt "haircut" for Greece.

On Thursday the German finance minister was in the Greek capital Athens and came bearing the same message.

On Friday Merkel said the repercussions of a writedown would be bad for the eurozone as a whole.
 
She said if a so-called "haircut" were to take place, another country might also request a debt write-down.

Such a move, she said, would lead to uncertainty for all investors in the euro area and call into question everything that has been done in recent years to stabilize the euro zone.

Iain Begg from the European Institute at the London School of Economics said the Greek situation should be assessed in isolation.

"Greece always has to be regarded as a special debt because it is much more extreme," Begg explained. "It has a huge public debt and that debt is owed to foreigners."

Portugal, Ireland and Cyprus have also received bailouts, but their loans are dwarfed in comparison to the $400 billion Greece has borrowed.

Nonetheless, Greek finances remain dire and the countries' economy keeps shrinking.  About one-quarter of the population is out of work.
 
As German federal elections loom, Mrs. Merkel may now be playing down the possibility of a debt write-down, but Begg said he thinks that perspective will have to shift.

European officials realize, he said, that Greece needs a new lifeline if its economy is to recover.

"You want to sort out the problems in the public sector but you aggravate them by squeezing too hard," Begg added. "And I think the European partners recognize this, which is why I think in the coming months you will see some moves to alleviate the pressure of public debt on the Greek economy."

Recent polls have shown that Merkel is likely to win the vote in Germany, which will be held on September 22.

You May Like

Is Air Travel Safe?

Aviation expert says despite tragic losses of Malaysian Airlines flights 370 and 17, industry experienced lowest fatality rate in recorded history last year More

Multimedia 100 Days Later, Nigerian Girls Still Held

Activists holding rallies in Nigeria and several other countries to mark 100th day of captivity for more than 200 schoolgirls being held by Boko Haram More

Chocolate Too Bitter? Swap Sugar for Mushrooms

US food technology company develops fermentation process using mushrooms to reduce bitterness in cocoa beans, believes it will cut sugar content in candy More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Carriers Suspend Travel to Israeli
X
Carolyn Presutti
July 23, 2014 1:21 AM
The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video US Carriers Suspend Travel to Israel

The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video NASA Focuses on Earth-Like Planets

For decades, looking for life elsewhere in the universe meant listening for signals that could be from distant civilizations. But recent breakthroughs in space technology refocused some of that effort toward finding planets that may harbor life, even in its primitive form. VOA’s George Putic reports on a recent panel discussion at NASA’s headquarters, in Washington.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.