• Germany's news in English

Germany rejects Greek loan application

AFP/The Local · 19 Feb 2015, 14:06

Published: 19 Feb 2015 11:06 GMT+01:00
Updated: 19 Feb 2015 14:06 GMT+01:00

Facebook Twitter Google+ reddit

“The letter from Athens is not a substantial suggestion for a solution,” Finance Ministry spokesman Martin Jäger told dpa in Berlin.

A eurozone 'working group' was to examine the proposal on Thursday before a meeting of finance ministers from countries using the single currency on Friday in Brussels.

But Jäger told journalists that the letter was simply aimed at obtaining a bridging loan, rather than fulfilling Greece's obligations under its bailout programme.

“The letter does not correspond to the criteria agreed at the Eurogroup meeting on Monday,” he said.

No details of the letter have yet been made public, meaning that it is so far unclear what conditions Athens is prepared to accept in exchange for continued emergency loans from its international creditors.

Greek government sources had said earlier that creditors should be able to accept 95 percent of their suggestions and undertakings.

The radical left Syriza government plans to pay all of its debts and recognize its obligations, as well as binding itself not to take any unilateral decisions that would increase its deficit – although it hopes to bring in measures to lighten the burden on people suffering under austerity measures.

Jeroen Dijsselbloem, the Dutch finance minister, tweeted that he had received the letter at 10:30 am.

Greece's previous bailout agreement with its creditors - other nations using the Euro single currency and the European Central Bank (ECB) - runs out at the end of February, meaning the country could be threatened with bankruptcy unless it finds new financing.

The last possible moment for the newly-elected radical left Syriza government to apply for an extension was on Friday, as several euro countries, including Germany, will have to seek approval from their parliaments for an extension.

German finance minister Wolfgang Schäuble has insisted that Greece stick to the bailout terms agreed with previous governments, under which the country must make painful structural reforms in exchange for financial support.

In negotiations over the past week, Finance Minister Yanis Varoufakis and Prime Minister Alexis Tsipras have sought to soften the reform programme demanded by creditors, which they say has plunged the country into poverty.

Varoufakis said on Wednesday evening that the request for aid would find a compromise between both sides' demands.

“Day by day, hour by hour, we're getting closer together,” he said.

On Wednesday, the ECB decided to continue supporting Greek banks with emergency funds known as Emergency Liquidity Assistance (ELA), extending its limit to €68.3 billion from €65 billion.

The news came on the same day as rumours that the ECB would like Greece to impose capital controls to stop the banking sector from hemorrhaging funds, although the bank denied any official discussions or proposals.

Story continues below…

"The ECB Governing Council and the ECB banking supervisors would feel better if there were capital controls to prevent the hemorrhaging of the banks," an unnamed ECB source was quoted as telling the Frankfurter Allgemeine Zeitung.

A spokesman for the Frankfurt-based ECB later told AFP that "there was no such discussion in the Governing Council" that met the previous evening.

The newspaper report said central bankers had recently been discussing why Greece had not yet introduced capital controls after more than €20 billion had been withdrawn from Greek bank accounts since December.

A capital control regime - which is allowed under EU rules and was used by Cyprus in early 2013 - allows a government to limit cash withdrawals and overseas transfers and to restrict banks' business operations.

SEE ALSO: Schäuble rejects Greek bailout without reforms 


For more news from Germany, join us on Facebook and Twitter.

AFP/The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Anger as Berlin scraps 'Armenia genocide' concert in Turkey
The Dresden Symphony Orchestra. Photo: DPA

Germany's foreign ministry Tuesday scrapped a planned symphony performance on the Armenian "genocide" in its Istanbul consulate, sparking accusations that it was caving in to Turkish pressure.

Obama to visit Berlin in last presidential trip to Germany
President Barack Obama and Chancellor Angela Merkel during a Berlin trip in 2013. Photo: DPA.

The White House announced on Tuesday that US President Barack Obama will be paying one last unexpected visit to the German capital - his last before he leaves office.

Hostility towards minorities 'widespread in Bavaria'
A village in southern Bavaria. Photo: DPA.

Hate and hostility towards groups deemed to be different are not just sentiments felt by fringe extremists, a new report on Bavaria shows.

Hated RB Leipzig emerge as shock challengers to Bayern
RB Leipzig. Photo: DPA

RB Leipzig's remarkable unbeaten start to the Bundesliga season has seen them suddenly emerge at the head of the pack chasing reigning champions and league leaders Bayern Munich.

Munich taxi driver in hospital after attack by British tourists
Photo: DPA

A taxi driver had to be hospitalized in Munich on Monday evening after three British tourists refused to pay their fare and then attacked him.

German police carry out nationwide anti-terror raids
Police outside a building in Jena during raids on Tuesday. Photo: DPA

Police forces in five German states carried out raids on Tuesday morning with the aim of tackling the financing of terror groups, police in Thuringia have reported.

The Local List
10 ways German completely messes up your English
Photo: DPA

So you've mastered German, but now it's time to learn English all over again.

Iconic German church being eroded away by human urine
Ulm Minster towering over the rest Ulm surrounding the Danube. Photo: Pixabay

It will now cost you €100 to spend a penny. That’s if you get caught choosing to pee against the world-famous Ulm Minster.

German small arms ammo exports grow ten-fold
Photo: DPA

The government has come in for criticism after new figures revealed that Germany exported ten times the quantity of small arms ammunition in the first half of 2016 as in the same period last year.

14-year-old stabs 'creepy clown' in prank gone wrong
File photo: DPA.

A 16-year-old in Berlin decided he wanted to scare some friends, but his plot backfired in a violent way.

Germany's 10 most weird and wonderful landmarks
Sponsored Article
Last chance to vote absentee in the US elections
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd