German minister warns Greece
Germany’s finance minister said in an interview published today that he cannot see room for further concessions to Greece, insisting anew the country must implement far-reaching reforms and cut its budget deficit.
International debt inspectors are scrutinising Greece’s finances and its progress in implementing unpopular budget cuts and reforms demanded in exchange for the rescue loan programme that is keeping the country afloat.
Greek officials have called for more time to implement the measures, but patience among creditors is running extremely short. If the inspectors’ report, expected in September, is damning, Athens could stop receiving rescue loans and face a disorderly bankruptcy and exit from the 17-nation euro.
“The aid programme is already very accommodating. I cannot see that there is still scope for further concessions,” German finance minister Wolfgang Schaeuble was quoted as telling the Welt am Sonntag newspaper.
As part of its austerity efforts, Greece has achieved a remarkable reduction of its budget deficit from 15.8 per cent in 2009 to 9.1 per cent last year. However, the country is considerably off-target in other areas of reform.
Athens largely blames this on a deeper-than-anticipated recession. However, a political crisis sparked by fierce rivalry between Greece’s main political parties stalled the reforms for three months, and a three-party coalition finally emerged in June after two inconclusive elections.
Mr Schaeuble said that “the problem did not arise because of flaws in the [rescue] programme but because it was insufficiently implemented by Greece”.
The country, he added, “cannot get around improving its competitiveness substantially through far-reaching reforms. In addition, Greece must achieve a sustainable level of debt by reducing its deficit.”
“It doesn’t help to speculate now about more money or more time,” Mr Schaeuble was quoted as saying.
Germany’s vice chancellor, Economy Minister Philipp Roesler, openly questioned last week whether Greece would satisfy the conditions to receive further aid and said the prospect of a Greek exit from the euro has “lost its horror”. He defended those comments, which prompted sharp criticism from Germany’s opposition, in an interview broadcast today.
“I remain sceptical as to whether Greece will actually have implemented the agreed reform conditions” when the debt inspectors report, Mr Roesler told Deutschlandfunk radio.
“There can be no discounts on reforms,” he said. “And that means: no further payments if the reforms are not fulfilled.”