European Agreements Exclude Debt Relief – German Finance Minister

European loan contracts exclude debt relief, but Greece could increase the trust of its international partners if it made constructive proposals on economic reforms, German Finance Minister Wolfgang Schauble said Thursday.

BERLIN (Sputnik) — On Wednesday, US Treasury secretary Jack Lew and International Monetary Fund (IMF) chief Christine Lagarde, in separate interventions, sought to grant debt restructuring to Greece to help the country resolve a financial crisis.

"European contracts exclude debt relief," Schauble said at a conference of the German Bundesbank.

The current primary goal is to restore the competitiveness of the Greek economy, otherwise the Greeks "will return to the same problems in a few years," the minister added.

Schauble also called on the Greek government to introduce reforms proposals demanded by the European lenders, and if it does, Greece will "build the great amount of trust."

Greece and its international lenders, to which Athens owes $270 billion, have been trying to find an agreement under which Greece would receive additional financial aid.

The negotiations deadlocked in late June as Greek Prime Minister Alexis Tsipras rejected the bailout deal proposed by lenders and announced a nationwide referendum on the issue. The vote resulted in Greek citizens rejecting the creditors' proposals.

Greece now has until late Thursday to present concrete proposals to its lenders to try to secure a new bailout.