Schäuble concedes third Greek bailout on the cards

Sat, Feb 25, 2012, 00:00

GERMAN FINANCE minister Wolfgang Schäuble has admitted that Greece is likely to require a third bailout, days before Bundestag MPs vote on Berlin’s contribution to the second €130 billion package.

Government and opposition MPs complained yesterday that they are being asked to vote again on a multibillion-euro package with too little information.

Mr Schäuble and chancellor Angela Merkel are confident of their own Bundestag majority to back Germany’s second Greek contribution on Monday.

Opposition parties have also signalled their readiness to vote in favour.

But Mr Schäuble said it was too early to say that this latest bailout – bringing to €237 billion the total EU-IMF financial assistance to Greece to date – would be the last.

“There is no guarantee that the route we have taken will lead to success and it is possibly not the last time that the Bundestag will have to consider financial assistance for Greece,” wrote Mr Schäuble in a letter to MPs.

Opposition politicians said that there was growing resignation, in all parties, that a third Greek bailout of at least €50 billion would be required.

Dr Merkel defended the bailout route yesterday as the only responsible way to avoid possible “external shocks” and “unpredictable consequences” of a Greek bankruptcy.

“No one can predict this, that’s why I’ve chosen this step by step way, knowing where I will go with the next step,” said Dr Merkel.

She dismissed growing demands in Germany, most recently aired by the Bildtabloid, to push Greece out of the euro – saying this could have negative consequences for countries left behind in the currency union. Instead she praised the “considerable” reforms passed by Greece in recent days as an important signal ahead of a second bailout.

“Of all the difficult paths we could go, this is still the best we can pursue at present,” she said.

Opposition parties have accused the government of providing too little information about the latest loans, and of fiddling the figures.

The full value of the second bailout, including unused funds from the first bailout, is closer to €154 billion, say the opposition Social Democrats.

Opposition MPs said that, behind the scenes, even government MPs are not convinced the second Greek bailout was the last.

“What was just agreed will not be enough,” said Gerhard Schick, Green Party finance spokesman. “I am convinced that there will be another financial restructuring in Greece.”

All parties have demanded greater detail on the contribution of the International Monetary Fund in the second bailout before they give their approval.

A draft of Monday’s Bundestag resolution demands further guarantees from Greece to deliver agreed reforms.

“We need assurances on these points,” said Norbert Barthle, CDU budgetary spokesman.

New polls show that two-thirds of Germans do not think Greeks are ready to shoulder the further austerity demanded by the second programme.

“In Germany, bailout fatigue is setting in,” said Otto Fricke of the Free Democrats junior coalition partner.