German Chancellor Angela Merkel makes a point during her speech at a session of the German lower house of parliament Bundestag in Berlin Nov 21, 2012. [Photo/Agencies]
BERLIN - German Chancellor Angela Merkel on Wednesday said it was likely to reach a deal at a meeting of European finance ministers by Monday, clearing the way for the release of the next aid tranche to Greece.
"There are chances to get a solution on Monday," Merkel told the lower house of parliament during a debate on the German budget. But she rejected the idea that big bold actions could solve the crisis, saying that step-by-step measures have to be taken to solve problems of Greece and eurozone as a whole.
"What was neglected over years, over decades, cannot be taken care of overnight and, therefore, we will need to continue to move step by step," Merkel said.
The IMF argued a haircut on debt held by official creditors would be an unavoidable option. But the German government staunchly opposes such a proposal.
Greece had reached a deal with private creditors on a write-off of 100 billion euros ($128 billion) of the national debt. The German government has rejected the proposal of an immediate second debt hair-cut program involving public creditors, as about two thirds of Greek debt directly affects public lenders.
Greece has been dependent on international bailout aid in return for drastic austerity measures, including pay cuts and higher retirement ages. It is awaiting access to 31.5 billion euros ($40.2 billion) of funds from a second EU-IMF bailout program that has been held up for several months.