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ECONOMY

Greek, German finance chiefs fail to reach deal on debt

AFP
3 min

Greek Finance Minister Yanis Varoufakis (pictured) and his German counterpart, Wolfgang Schaeuble, acknowledged after talks on Thursday that deep divisions remain over how to solve Greece's debt problems.

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"We had long and intensive discussions, but we were not in complete agreement," Schaeuble told a joint news conference after meeting Varoufakis for the first time.

The meeting between the two men was the final leg of a diplomacy tour by Varoufakis to drum up support for a renegotiation of Greece's massive international bailout.

The new government in Greece is hoping to persuade its European partners to agree to renegotiate the terms of its €240 billion ($275 billion) bailout, funded by the International Monetary Fund, the European Central Bank (ECB) and the EU Commission, collectively known as the "Troika".

The two men did not even agree on an assessment of the meeting after talks wound up.

"We agreed to disagree," Schaeuble said, prompting Varoufakis to retort: "We didn't reach an agreement. It was never on the cards that we would. We even didn't agree to disagree, from where I'm standing."

But both men said that a debt write-down or "haircut" was currently not an option.

"We agreed – if I understood correctly – that the issue of a debt haircut is not relevant at present," Schaeuble said.

"We didn't discuss a haircut," Varoufakis said, adding that the new government in Athens would do "everything in our power to avoid any default".

That task could become more difficult after the ECB announced Wednesday that it would no longer accept Greek governments bonds – currently rated as junk – as collateral for loans, effectively shutting off a key channel of financing for Greek banks.

But the ECB later said it would make up to €60 billion ($68.5 billion) in emergency liquidity available to Greek banks, a source close to a national central bank told AFP on Thursday.

Schaeuble went on to say he was "sceptical" about many of Greece's proposals.

"I was unable to hide my scepticism ... that some of the measures do not go in the right direction," he told the joint news conference.

Ahead of his meeting with Schaeuble, Varoufakis told German media that Greece was at risk of seeing tensions rise further over unpopular austerity measures. He compared the frustration Greeks were feeling domestically with that experienced by interwar Germany.

"I think that of all countries in Europe, the Germans understand best this simple message," Varoufakis told the ARD public broadcaster. "If you humiliate a proud nation for too long ... without light at the end of the tunnel, then the pressure will rise in this country at some point.”

(FRANCE 24 with AFP and AP)

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