GREECE

Merkel says Grexit off the table, rules out debt write-off

German Chancellor Angela Merkel has rejected the idea of a Greek debt haircut, saying it wouldn't work in a currency union. At the same time, she has also ruled out forcing Greece to leave the eurozone.

German Chancellor Angela Merkel on Sunday dismissed the idea of writing off part of Greece's debt, but she said Berlin was open to a flexible repayment plan.

In an interview with ARD television, she reaffirmed that "a classic haircut of 30, 40 percent of debt cannot happen in a currency union."

But Merkel said she was open to discussing ways to lessen the burden on Athens and defended the existing deals with lenders that come with more favorable interest rates, time extensions and other relief.

She insisted debt relief talks could only begin after details of Greece's latest bailout program are finalized.

On Friday, German MPs voted overwhelmingly to back another financial rescue package, despite being branded senseless by many voters.

Greeks brace for another round of reforms

Grexit off the table

Talks are expected to last four weeks to reach an anticipated 85 billion euro ($93 billion) deal over three years, which will include economic targets and further public sector reforms.

Asked about Finance Minister Wolfgang Schäuble's suggestion last week that Greece could take a five-year "timeout" from eurozone, Merkel said the idea of a "Grexit" was no longer on the table.

On Friday, she told parliament that a temporary exit would lead to "predictable chaos."

On Sunday, German Vice Chancellor and Economics Minister Sigmar Gabriel criticized Schäuble's remarks and defended Germany's handling of the crisis.

"In my opinion, it was not wise to present this as a German suggestion," he said in a television interview with public broadcaster ZDF.

But Gabriel added that it was unrealistic for Germany to take on so much risk without calling for Greece to implement structural changes.

mm/sms (AFP, AP