Scholz: ESM reform will not involve automatic debt restructuring

But it will undoubtedly support those countries that are struggling, Germany’s finance minister insists

Germany’s Finance Minister Olaf Scholz

A proposed reform of the eurozone bailout fund (ESM) will not involve automatic debt restructuring for struggling countries, Germany’s Finance Minister Olaf Scholz told Italian daily newspaper La Repubblica.

In an interview published on Saturday, Scholz said the ESM’s task was to instead support struggling countries by lending them money subject to certain conditions.

“There is not any automatic debt restructuring,” he added.

His words came as Italy’s ruling parties failed to reach an agreement on Friday over the planned ESM reform, according to Reuters, since Rome frets about the impact the changes could have on the country’s massive public debt.

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