German Finance Ministry Rules Out New Debt Writedown for Greece

August 12, 2013, 6:48 a.m. ET

By Harriet Torry

BERLIN--Germany's finance ministry on Monday stuck with its steadfast rejection of further debt relief for Greece, despite a weekend news report suggesting even the country's central bank expects a new Greek aid package will be necessary by the beginning of next year at the latest.

With less than six weeks to go until nationwide elections in Germany, a spokesman for the German finance ministry told reporters "a second haircut [on debt] is out of the question" and expressed confidence in Greece's ability to overcome obstacles.

The comments come after news magazine Spiegel reported Sunday that Germany's Bundesbank expects Greece will need a new aid package by early 2014, citing a central bank internal document. The Bundesbank declined to comment on the report.

The finance ministry spokesman, Martin Kotthaus, said he wasn't aware of a new document from the Bundesbank and didn't know which document the Spiegel article refers to.

"The numbers we have speak clearly--Greece is coming along well," Mr. Kotthaus told reporters.

"We'll look at what Greece does, we'll look at how Greece implements the program, we'll see if Greece achieves a primary surplus in 2014--that's the agreement--and then if we ascertain that more money is needed, we will discuss it," Mr. Kotthaus said, adding it is difficult to speculate on anything that could happen in 2014.

He said the ministry expects the troika of international creditors to provide an update on Greece's current program in October.

Debt relief for Greece remains a prickly topic ahead of the German elections. Although Greece hopes that after the vote Berlin will allow negotiations on the issue of cutting the value of Greek government debt held by the currency union's member governments, the German government has staunchly rejected the idea for months.

A write-down would be particularly unpopular with German voters and would be seen by many as an implicit admission that the German-led austerity approach had failed.

Write to Harriet Torry at harriet.torry@dowjones.com