Joe Oliver urges EU to compromise on Greek debt

Canadian Finance Minister Joe Oliver has urged EU countries to find a compromise with Greece over its debt burden, an issue that hangs over the eurozone in the wake of election of an anti-austerity government in Greece.

"What we have to do is to arrive at a solution which will require a compromise. Greece is in financial difficulty,” said Oliver in an interview with CBC at the G20 meeting of finance ministers and central bankers in Istanbul.

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Oliver reproached Greece for decades of mismanagement, which has led to a heavy debt burden, equivalent to 175 per cent of the country’s GDP.

"There are some countries that have engrained in them policies that are dysfunctional for growth. And we see in Greece what happens when a country over a period of time  spends more than it earns. One can't sustain that. An individual family can't sustain it. A nation can't sustain it," he said.

Greek PM Tsipras asks Germany for 'war reparations'

Greece’s new leftist Prime Minister Alexis Tsipras, in his first major speech to parliament on Sunday, laid out plans to dismantle the country's austerity program, which has seen deep cuts to public services and reductions in wages to government workers.

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Tsipras ruled out any extension of Greece’s 240-billion-euro (about $340 billion Cdn) international bailout, the terms of which expire on Feb. 28.

It also demanded war reparations from Germany, the country that has been most adamant in saying there would be no compromise. That prompted an outright objection from Sigmar Gabriel, Germany's vice-chancellor and economy minister, on Monday.

"The probability is zero," said Gabriel, when asked if Germany would make such payments to Greece, adding a treaty signed 25 years ago had wrapped up all claims related to Germany’s Second World War-era destruction of Greece.

Tsipras has said he wants to take out bridge loan until June, to win time for a new deal on Greece’s debt.

Oliver made only an oblique reference to Tsipras demands, saying there is little chance of Greece’s debt being forgiven by the EU.

'Live with the fiscal reality,' Oliver says

“It has made some assertions but they're going to have to live with the fiscal reality they're in. On the other hand, I think Europe and other countries have to take into account the difficulties and be a bit accommodating," Oliver said.

Greece’s economy has been moribund under the austerity program and is seeking a deal that will put some money back into the pockets of its people.

On Wednesday, Greek Finance Minister Yanis Varoufakis will take a debt proposal to an extraordinary meeting of the "Eurogroup" of 19 eurozone finance ministers in Brussels.

The topic will overshadow a meeting the next day of the European Union's 28 national leaders  in Brussels.

EU leaders fear Greece will default on its debt and exit the 19-member eurozone, throwing the region’s financial markets into turmoil. Europe is already struggling with deflation and with slower than expected growth.

But Greek’s demands are also front of mind at the G20, where some countries, including Canada, are trying to advance the country-specific growth strategies agreed to at the last G20 meeting in Brisbane.

Those strategies, if implemented, aim to increase global growth through lifting the G20’s collective gross domestic product by 2.1 per cent by 2018, Oliver said in a statement.