(Reuters) - German
Chancellor Angela Merkel ruled out a debt write down for Greece on Saturday,
and a European Central Bank policymaker threatened to cut off funding to Greek
banks if Athens does not agree to renew its bailout package.
Alexis Tsipras has
also promised to renegotiate agreements with the European Commission, ECB and
International Monetary Fund "troika" and write off much of Greece's
320 billion euro ($360 billion) debt, which at more than 175 percent of gross domestic
product is the world's second-highest after Japan.
"There was
already a voluntary waiver by private creditors; Greece has already been exempt
from billions by the banks. I don't see a further debt haircut," she told
German daily Die Welt in an interview published in its Saturday edition.
"Europe will
continue to show solidarity for Greece, as for other countries hit particularly
hard by the crisis, if these countries undertake their own reforms and savings
efforts," Merkel added in a thinly veiled threat to Athens.
Without the support of
international lenders, Greece would soon find itself back in an acute financial
crisis. Unable to tap the markets because of sky-high borrowing costs, Athens
has enough cash to meet its funding needs for the next couple of months. But it
faces around 10 billion euros of debt repayments over the summer.
"I'M WAITING," MERKEL TELLS ATHENS
Greece's new
government opened talks on its bailout with European partners on Friday by
refusing to extend the program or to cooperate with the international
inspectors overseeing it.
Separately, the French
finance ministry said on Saturday that Greek Finance Minister Yanis Varoufakis
will meet with his French counterpart Michel Sapin in Paris on Sunday and issue
a statement afterwards.
Europe's bailout
program for Greece, part of a 240 billion euro rescue package also involving
the International Monetary Fund, expires on Feb. 28. A failure to renew it
could leave Athens unable to meet its financing needs and cut its banks off
from central bank liquidity support.
The ECB does not
accept Greek sovereign bonds as collateral in its refinancing operations as
they are below investment grade. However, it allows central bank financing to
Greek banks as the country is in a bailout program.
Erkki Liikanen, a
member of the ECB's policymaking Governing Council, said that funding, too,
could dry up if Greece does not remain in a program.
"Greece's program
extension will expire in the end of February so some kind of solution must be
found, otherwise we can't continue lending," Liikanen, also the governor
of Finland's central bank, told public broadcaster YLE.
Merkel said the ECB's
Jan. 22 decision to pump billions of euros into the euro zone with a
bond-buying program did not mean countries would end efforts to shape up their
economies with structural reforms.
She put the onus on
the New Greek government to present a credible economic policy. "The goal
of our policy was and is that Greece remains a permanent part of the
euro-community," Merkel said.
"To that end,
Greece and the European partners make their contribution. Apart from that, I am
now waiting to see what concepts the Greek government will present."