Merkel: Traditional Debt Cancellation for Greece Out of Question

Angela Merkel says that a traditional debt cancellation for Athens is out of the question.

MOSCOW (Sputnik) — A traditional debt cancellation for Athens is out of the question, but the lenders will negotiate Greece's debt relief, German Chancellor Angela Merkel said Sunday.

"Traditional debt cancellation is out of the question," Merkel said in an interview with the German ZDF television channel, adding that Germany and other eurozone countries have a "wide scope of action" in respect of debt relief for Athens.

On Friday, the Eurogroup approved an €86-billion ($93 billion) bailout package aimed at rebuilding Greece's ailing economy in exchange for reforms.

Following the move, head of the International Monetary Fund (IMF) Christine Lagarde welcomed the Eurogroup's decision to provide Greece with a new financial aid package, but insisted that additional relief was necessary to ensure the country's medium and long-term debt sustainability.

"I have no doubt that what Lagarde has said will become a reality," Merkel said, adding that the sides would continue to negotiate this issue.

Under the new package, Greece receives the first tranche of 26 billion euros in two payments. The first sub-tranche of 10 billion is to be made available immediately.

The second sub-tranche of 16 billion euros will be disbursed to Greece in several instalments, starting with a first disbursement of 13 billion euros by August 20, when Greece is due to make a €3.4-billion ($3.8 billion) repayment to the European Central Bank (ECB.)