Schäuble says Greece will need a decade to recover, criticises Italy

Finance Minister Wolfgang Schäuble said he expected Greece would need a decade to get over its debt crisis, and that it was clear there was no way it would return to the capital market in 2012.

Schäuble says Greece will need a decade to recover, criticises Italy
Photo: DPA

“Greek will certainly need a decade rather than a year to return to full competitiveness,” he told weekly business magazine Wirtschaftswoche.

Much depended on the Greeks’ acceptance of harsh economic measures, he said.

“We cannot spare the Greek people the necessary adjustment measures. At the end, the people decide whether they can, and will, take the burden,” he added.

The Greek government was at least clearly in favour of doing all that was necessary to remain within the euro, although this made significant demands of the people, said Schäuble.

“We should have respect for the enormous adjustment burdens which are being demanded from the Greek people. Although it does not always seem to be fair, if one can believe the media reports of yachts in Piraeus or Mykonos and other places.”

He said if Greece was not rescued during the current euro crisis, the European Union itself could collapse.

“There is a real danger that the currency union could fall apart. The EU would lose enormously in terms of political credibility and ability to act in the future,” he told the magazine.

Schäuble also criticised the Italian government for its lack of consistency in the financial crisis and called for it to make more effort to win over the trust of the financial markets.

“Those responsible in Italy – and in all other countries – have to know that it is problematic to announce measures or promises and then not to keep to them. That is no way to win the trust of the financial markets.”

The Local/hc

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German war crime payments debated in Greece

Greece's parliament on Wednesday began a debate on a resolution to demand the payment of German war crime reparations, an issue long disputed by Berlin.

German war crime payments debated in Greece
Angela Merkel and Alexis Tsipras in Greece in January. Photo: DPA

“These demands are always active. They were never set aside by Greece,” parliament chairman Nikos Voutsis told reporters this week.

The chamber is expected to approve later Wednesday, with cross-party support, a resolution calling on the government of Premier Alexis Tsipras “to take all the necessary diplomatic and legal steps to claim and fully satisfy all the demands of the Greek state stemming from World War I and World War II”.

A parliamentary committee last year determined that Germany owes Greece at least €270 billion for World War I damages and looting, atrocities and a forced loan during the Nazi occupation in World War II.

Reclaiming war reparations has been a campaign pledge by Tsipras since 2015. He faces multiple electoral challenges this year, with his party trailing in polls.

'Historical responsibility'

During a visit to Greece in January, German Chancellor Angela Merkel said her country “recognised its historical responsibility.”

SEE ALSO: Merkel says Germany recognizes responsibility for Nazi war crimes in Greece

“We recognize our historical responsibility. We know how much suffering we, as Germany in the time of Nazism, have brought to Greece,” she said.

In 2014, ex-president Joachim Gauck had also sought public forgiveness in the name of Germany from relatives of those murdered by the Nazis in the mountains of northern Greece.

But when it comes to actual payments, the German government has always insisted that the issue was settled in 1960 in a deal with several European governments.

Germany's government spokesman Steffen Seibert reiterated Wednesday that “the reparation issue is judicially and politically settled”. 

He said Berlin is doing “everything it can so Greece and Germany maintain good relations as friends and partners”. 

During the Greek economic crisis, there was further tension in Athens over draconian EU austerity and bailout terms seen to be imposed by Berlin hardliners.

Relations have improved over the last three years after Tsipras' government endorsed conditions linked to satisfying its creditors.

Tsipras and Merkel also worked closely on finding common ground on migration and Balkans security.