Merkel rejects Greek debt restructuring

May 17, 2011

, FRANKFURT, May 17 – German Chancellor Angela Merkel opposes a restructuring of Greek debt, putting her at odds with her own finance minister, the German daily Bild said on Tuesday.

During a discussion with students at the Sophie-Scholl school on Monday in Berlin, Merkel backed aid for Greece and ruled out changes to debt repayment prgrammes for any eurozone countries before 2013, Bild said.

The newspaper did not provide direct quotes by the German chancellor however.

Financial markets have increasingly bet on the possibility that Greece will either extend the repayment period on its debt or decide it must reimburse less than the full amount owed.

On Sunday, German Finance Minister Wolfgang Schaeuble said he could support a longer repayment period if private creditors agreed to it, something known as a voluntary restructuring.

A similar idea has also been given a new name, reprofiling, as mooted on Monday by eurozone finance ministers meeting in Brussels.

Jean-Claude Juncker, head of the Eurogroup of finance minsters told media "I don\’t exclude it," when asked about a possible reprofiling of Greece\’s debt.

But Juncker also stressed that Greece would have to take new measures to raise money on its own before such an option could be considered.

The German finance ministry said Tuesday there were no fundamental differences between the positions of Schaeuble and Merkel.

"As far as Greece goes, there is no dissension between the minister and the chancellor," a spokesman said.

That could mean Merkel rejects the notion of a sharp restructuring in the amount of the debt, but might accept an extension of the payment timetable.

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