Greek debt crisis: Germany 'may consider' debt relief

German Chancellor Angela Merkel says she is prepared to consider further debt concessions to Greece once its latest economic reforms are worked out.

In a television interview, she said she was open to discussing reduced interest rates and extended maturity dates.

But she said this would happen only after details of the latest bailout had been negotiated, and reiterated that there would be no debt write-off.

Meanwhile France's president called for the creation of a eurozone government.

Reviving an idea originally put forward by former European Commission chief Jacques Delors, Francois Hollande proposed "a specific budget as well as a parliament to ensure democratic control" of the eurozone.

"What threatens us is not an excess of Europe but its insufficiency," Mr Hollande wrote in a French newspaper.

The 19 countries who use the euro are members of an informal body, the Eurogroup, made up of each country's finance minister.

The complex negotiations earlier this month over whether to grant Greece a third bailout highlighted vastly different points of view between the various eurozone members.

'Not now, but then'

Germany - which is the largest contributor to Greek rescue funds - have taken a tough line on Greece.

Both Greece and, one of its key creditors The International Monetary Fund, have been arguing for a restructuring of its €320bn debt saying its current position is "unsustainable".

But Mrs Merkel said again on Sunday that "a classic haircut of 30, 40% of debt cannot happen in a currency union."

"Greece has already been given relief. We had a voluntary haircut among the private creditors and we then extended maturities once and reduced interest rates," she said in an interview with ARD TV to be broadcast later on Sunday.

"And we can now talk about such possibilities again... once the first successful review of the programme to be negotiated has been completed, then exactly this question will be discussed - not now, but then," she said.