German Finance Minister: talk of Greek debt writedown saps reform drive

German Finance Minister Wolfgang Schaeuble said on Friday that speculation about a write-down of Greek debt held by official creditors undermined the country's efforts to set its public finances in order.

Addressing the German lower house of parliament ahead of a vote on a new bailout package for Greece, he praised Athens' reform efforts and said failure to provide further aid would lead to bankruptcy and the possible break-up of the euro zone.

"If we say the debts will be written off (Greece's) willingness to make savings is correspondingly weakened," Schaeuble told the Bundestag. "Such false speculation do not solve the problems."

"A Greek bankruptcy could lead to the break-up of the euro zone," he added.

(Reporting by Gernot Heller and Stephen Brown, writing by Gareth Jones)