German Finance Minister Wolfgang Schauble, Jorg Asmussen, a member of the executive board at the European Central Bank, and Austrian Finance Minister Maria Fekter have all said that writing down Greek debt, which would mean taxpayers across Europe would take a hit from the Greek bailouts, was not a palatable solution.
Schauble has even said the move would be illegal, The New York Times reported Monday.
But leaders gathered in Brussels Monday for a third meetings in three weeks to figure out how to get through an impasse that is holding up $40.8 billion in loans to Greece.
A new agreement could even clear the path so Greece can receive $57 billion, as a series of loans has been on hold since June, when the international community froze a $168.5 billion credit line set up for Greece.
While leaders debate how to accept that Greece will not hit budget targets on time, economic conditions in the country deteriorate further. Unemployment is about 24 percent and the gross domestic product is slipping quickly.
Meanwhile, the International Monetary Fund is on the other side of the debate, arguing that a write-down or considerably larger loans will be necessary.
The IMF has drawn a line in the sand, insisting Greece lower its debt to 120 percent of its gross domestic product by the end of 2019.
It is now at 175 percent of GDP and could reach 200 percent by 2014 if the economy continues to shrink, some analysts have concluded.
It looks currently like something has to give. The IMF has to lower its expectations or creditors, such as Germany, have to expect either more money will be needed or a haircut -- losses -- on debt will be on the table.
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