ISTANBUL (Reuters) - Canadian Finance Minister Joe Oliver called on Monday for compromise over Greece’s debt, telling Reuters that while Athens must not simply disavow its debt, its creditors needed to work with it for a compromise solution.
Greece wants to reverse the austerity measures that are the conditions of an international bailout that is helping keep it financially afloat. But there is little sign that official creditors are willing to accept this or to extend loans that would buy time to negotiate with Athens.
“There has to be compromise. It’s clear that Greece has got to be prepared to make some changes, and I think a wholesale repudiation of their debt is not on the cards,” Oliver said as he prepared for a meeting of the Group of 20 (G20) leading economies.
“But other countries, creditors will have to work with Greece to arrive at a compromise solution. I don’t think anybody wants Greece to leave the currency union.”
Moments later, U.S. Treasury Secretary Jack Lew also urged Greece and Europe to “tamp down the rhetoric” in heated discussions over Athens’ hopes of easing back on austerity measures.
Oliver said the fact that the global outlook had once again been downgraded made it all the more important to implement action plans agreed by the G20 last year to add 2 percent to the world economy within five years.
Additionally, there is some pressure on Germany and other northern European countries with fiscal capacity to do more to help the global economy.
“I know there is some difference of views in that respect,” he said. “Germany is of the view that structural change is needed, and they feel strongly about not wanting to jeopardize their financial stability,” Oliver said.
As to whether countries in surplus should go into deficit to boost global growth, he said: “We’re not advocating deficits for others, because we’re not intending to go into a deficit ourselves. In fact, we’re going to...balance our budget.”
Spending on infrastructure was not a matter of yes or no, but a matter of where on the continuum one puts the pin, he said, noting federal Canadian long-term plans for C$75 billion ($60 billion) in infrastructure spending.
As G20 chair this year, Turkey is emphasizing investment. Oliver said pension plans have capital and have been investing in infrastructure, and one way to attract more investment is through “de-risking”.
This involves making sure some of the risks on construction and regulatory approval are dealt with before they get involved.
One perennial issue the G20 deals with is whether to pressure China over its currency. “We’ve said that we think it’s appropriate for countries to have free-floating currencies,” he said, but added “we’ll see” whether there would be more pressure on them in Istanbul.
Reporting by Randall Palmer; Editing by Nick Tattersall and Anna Willard