German pols across political spectrum admit Greek 'haircut' necessary

More and more German lawmakers are coming to terms with the prospect of some sort of a debt relief for Greece as unavoidable, and openly considering the idea. The latest official is German Deputy Finance Minister Jens Spahn, who said there should be a discussion on a debt relief for Greece, speaking to German newspaper ‘Welt am Sonntag’.

In the wake of the Bundestag’s debate on the latest Greek bailout plan on Wednesday, Spahn underlined that there was a common perception that there needs to be relief on the Greek public debt, “but not a write-off because that is forbidden by the Euro treaty’, he added. The German politician pointed out there could be an extension of payments over a longer duration and a substantial reduction in interest rates, claiming that the final result would be the same as if a real hair-cut was implemented, while European taxpayers will not feel the immediate burden, but only in the long-run. He added that if Germany wanted the IMF to be a part of the new bailout plan it should prepare for a debt relief for Greece.

Meanwhile, Johannes Kahrs, the spokesperson of the Social Democrats (SPD) party, said the Greek government should be facilitated to relieve its debt, addressing the Budget Committee in the German legislature.

The Green party also showed its support to such a plan, as its leader, Anton Hofreiter, said he was for a relief so that the new bailout plan would be well-grounded in order to attract future investments.

“Debt servicing over the next years should be implemented in such a manner so that primary surpluses can be invested in economic growth”, said the Greens leader.