IMF right about Greek debt but 'haircut' not possible under EU rules, Schaeuble says

He admitted that the International Monetary Fund (IMF) was right to say that Greece's debt was not sustainable without a "haircut" but ruled out this possibility on the grounds that it violates EU rules.

"If Greece wants to restore trust, then it must carry out reforms," Schaeuble told a Bundesbank conference in Frankfurt, where his French counterpart Michel Sapin was also speaking, adding that Athens had "done nothing".

Regarding the capital controls imposed in Greece, he said it was unknown when these will be lifted, adding that it could be some time. "We cannot transfer the risk of a government to a community," he said, stressing that banking risks must be isolated from the main dangers.

"Already since 2012 we went further than the IMF...the margins we have due to the restructuring or reprofiling of the debt are very small and in the next few days we will discuss whether there is still such an option. But I am more cautious on this than Michel Sapin," he said.

However, he did say that new Greek Finance Minister Euclid Tsakalotos was "more conventional than his predecessor" and that in his first meeting, he told Tsakalotos to "just do it!" and press ahead with reforms.