https://www.theguardian.com/world/2...reform-or-leave-eurozone-says-german-minister
Greece must reform or leave eurozone, says German minister
Wolfgang Schäuble rules out debt relief for Greece before meeting of eurozone’s finance ministers
Wolfgang Schäuble.
Schäuble said the Greek budget was not burdened by debt servicing because interest rates were so low. Photograph: Gregor Fischer/AFP/Getty Images
Helena Smith in Athens
Sunday 4 December 2016 16.29 GMT
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Greece must implement economic reforms if it is to keep its place in the eurozone, Germany’s finance minister has insisted, ruling out debt relief for the country ahead of a crucial euro group meeting on Monday.
As the finance ministers of member states using the single currency prepared to discuss fiscal plans for the coming year, Wolfgang Schäuble in effect presented Greece with an ultimatum: either it must enforce unpopular structural reforms or exit the bloc.
“Athens must finally implement the needed reforms,” he told the newspaper Bild am Sonntag in an interview published on Sunday.
“If Greece wants to stay in the euro, there is no way around it – in fact completely regardless of the debt level.”
Asked if German voters should be prepared for the inevitability of debt relief in the run-up to national elections next year, Schäuble quipped: “That would not help Greece.”
Schäuble, who also asserted the Greek budget was not burdened by debt servicing because interest rates were now so low, made the comments as speculation mounted over how best to put the thrice-bailed-out nation back on the road to economic recovery. On Friday the German finance ministry announced that short-term measures to lighten Greece’s debt load would be among the proposals up for discussion at the euro group meeting.
Athens’s leftist-led government has long argued that the country’s staggering €330bn debt load is the single biggest impediment to sustainable growth. It is an argument that has won backing from the International Monetary Fund.
Time is of the essence. The economic crisis enveloping Greece is far from over despite more than €300bn of emergency loans since 2010 when, after its first brush with bankruptcy, it received its first EU-IMF sponsored bailout.
'Everyone’s outraged': angry Greeks foresee Grexit and drachma's revival
Read more
Amid relentless tax rises and budget cuts – the price of the aid – support for the euro is falling fast with graffiti extolling the virtues of the drachma appearing across the capital. Euclid Tsakalatos, the Greek finance minister, has said the situation “is as critical as it was in the summer of 2015” when, under threat of euro ejection, Athens received its third €86bn rescue package.
With his own popularity plummeting in the face of fury over creditor-mandated cutbacks, the prime minister, Alexis Tsipras, had hoped to wrap up a second review of policy measures in time for Monday’s meeting as part of a broader strategy to secure short-term debt relief and participation of Greek bonds in the European Central Bank’s quantitative easing programme. The latter, he argues, is vital to Greece returning to international capital markets when its current bailout expires in mid-2018.
Instead, the review has been bogged down by disputes over contentious labour reforms including the abolition of collective bargaining and guards against companies laying off workers – red lines for leftists in the ruling Syriza party. Recently the IMF has added to the pressure, saying Athens will have to apply €4.2bn worth of extra measures to meet fiscal targets after 2018, a demand widely seen as the tipping point for austerity-whipped Greeks.
But Tsipras is also acutely aware that forthcoming European elections and the possible loss of sympathetic friends – starting with Italy’s Matteo Renzi in Sunday’s referendum – could spell further trouble for the eurozone’s weakest link by quashing any chance of debt relief. Tellingly, leading Syriza cadres and MEPs have in recent weeks underlined the need for a “plan B” and not ruled out euro exit.
Highlighting the significance of Monday’s euro group meeting, the EU economic affairs commissioner, Pierre Moscovici, said discussion of fiscal plans would take place against a backdrop of the commission calling “for a positive fiscal stance for the eurozone as a whole”.
Pierre Moscovici
(@pierremoscovici)
The #eurozone today needs a positive fiscal stance to support growth. My thoughts ahead of tomorrow's #Eurogroup https://t.co/5T4clUWO00
December 4, 2016
More news Topics
Greece Eurozone Germany Europe
Greece must reform or leave eurozone, says German minister
Wolfgang Schäuble rules out debt relief for Greece before meeting of eurozone’s finance ministers
Wolfgang Schäuble.
Schäuble said the Greek budget was not burdened by debt servicing because interest rates were so low. Photograph: Gregor Fischer/AFP/Getty Images
Helena Smith in Athens
Sunday 4 December 2016 16.29 GMT
View more sharing options
Shares
1,089
Greece must implement economic reforms if it is to keep its place in the eurozone, Germany’s finance minister has insisted, ruling out debt relief for the country ahead of a crucial euro group meeting on Monday.
As the finance ministers of member states using the single currency prepared to discuss fiscal plans for the coming year, Wolfgang Schäuble in effect presented Greece with an ultimatum: either it must enforce unpopular structural reforms or exit the bloc.
“Athens must finally implement the needed reforms,” he told the newspaper Bild am Sonntag in an interview published on Sunday.
“If Greece wants to stay in the euro, there is no way around it – in fact completely regardless of the debt level.”
Asked if German voters should be prepared for the inevitability of debt relief in the run-up to national elections next year, Schäuble quipped: “That would not help Greece.”
Schäuble, who also asserted the Greek budget was not burdened by debt servicing because interest rates were now so low, made the comments as speculation mounted over how best to put the thrice-bailed-out nation back on the road to economic recovery. On Friday the German finance ministry announced that short-term measures to lighten Greece’s debt load would be among the proposals up for discussion at the euro group meeting.
Athens’s leftist-led government has long argued that the country’s staggering €330bn debt load is the single biggest impediment to sustainable growth. It is an argument that has won backing from the International Monetary Fund.
Time is of the essence. The economic crisis enveloping Greece is far from over despite more than €300bn of emergency loans since 2010 when, after its first brush with bankruptcy, it received its first EU-IMF sponsored bailout.
'Everyone’s outraged': angry Greeks foresee Grexit and drachma's revival
Read more
Amid relentless tax rises and budget cuts – the price of the aid – support for the euro is falling fast with graffiti extolling the virtues of the drachma appearing across the capital. Euclid Tsakalatos, the Greek finance minister, has said the situation “is as critical as it was in the summer of 2015” when, under threat of euro ejection, Athens received its third €86bn rescue package.
With his own popularity plummeting in the face of fury over creditor-mandated cutbacks, the prime minister, Alexis Tsipras, had hoped to wrap up a second review of policy measures in time for Monday’s meeting as part of a broader strategy to secure short-term debt relief and participation of Greek bonds in the European Central Bank’s quantitative easing programme. The latter, he argues, is vital to Greece returning to international capital markets when its current bailout expires in mid-2018.
Instead, the review has been bogged down by disputes over contentious labour reforms including the abolition of collective bargaining and guards against companies laying off workers – red lines for leftists in the ruling Syriza party. Recently the IMF has added to the pressure, saying Athens will have to apply €4.2bn worth of extra measures to meet fiscal targets after 2018, a demand widely seen as the tipping point for austerity-whipped Greeks.
But Tsipras is also acutely aware that forthcoming European elections and the possible loss of sympathetic friends – starting with Italy’s Matteo Renzi in Sunday’s referendum – could spell further trouble for the eurozone’s weakest link by quashing any chance of debt relief. Tellingly, leading Syriza cadres and MEPs have in recent weeks underlined the need for a “plan B” and not ruled out euro exit.
Highlighting the significance of Monday’s euro group meeting, the EU economic affairs commissioner, Pierre Moscovici, said discussion of fiscal plans would take place against a backdrop of the commission calling “for a positive fiscal stance for the eurozone as a whole”.
Pierre Moscovici
(@pierremoscovici)
The #eurozone today needs a positive fiscal stance to support growth. My thoughts ahead of tomorrow's #Eurogroup https://t.co/5T4clUWO00
December 4, 2016
More news Topics
Greece Eurozone Germany Europe
