German Finance Minister Wolfgang Schaeuble and his Greek counterpart Yanis Varoufakis acknowledged Thursday deep divisions over to how to solve Greece's debt problems. "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 whistlestop diplomacy tour by Varoufakis to drum up support for Athens' planned renegotiation of its massive international bailout.
But with both men conceding that there appeared to be little common ground, the meeting seemed to be anything but a success. "We agreed to disagree," Schaeuble said, while Varoufakis retorted: "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."
The new government in Greece is hoping to persuade its European partners to agree to renegotiate terms of its 240-billion-euro ($275-billion) EU-IMF bailout. But both Schaeuble and Varoufakis insisted that a debt write-down or "haircut" was not an issue at present. "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 agreed, and added that the new government in Athens would do "everything in our power to avoid any default." That task could become more difficult because on Wednesday the European Central Bank announced 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. Schaeuble said that Athens' negotiations on its debt "must be held" with the so-called Troika of creditors, comprising the EU Commission, the ECB and the International Monetary Fund (IMF). Greece's new leftist Prime Minister Alexis Tsipras has demanded an end to the Troika oversight system. Schaeuble said 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.