German Chancellor Angela Merkel said on Tuesday that a so-called 'debt haircut' for Greece was not possible in the Eurozone framework.

"It is not a demand of the federal government to have no debt haircut but rather in our opinion this is legally not possible in the Eurozone. But through our statements in the last year, we have also opened opportunities. Now we must first try to implement the program and call for the program to be complied with. The Greek government keeps emphasizing they are ready, and now with that, the talks must continue and be led through the necessary measures. I believe we're on a very reasonable way, but we're unfortunately not yet on target," Merkel said.

The comments were made by Merkel after meeting with IMF chief Christine Lagarde. The IMF has shown reluctance in participating in the bailout without a firm promise of debt relief for Greece from the EU. Merkel said Germany wanted the IMF to stay in the bailout program. She also said the relief cannot be discussed, until Athens has demonstrated compliance with the terms of the bailout.