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'Unusually tough' Greece talks ahead: Schäuble

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'Unusually tough' Greece talks ahead: Schäuble
Wolfgang Schäuble in Brussels on Thursday. Photo: DPA
16:21 CEST+02:00
Finance Minister Wolfgang Schäuble said at a meeting in Brussels on Tuesday that talks to unlock a third financial aid package for Greece would be “unusually difficult”, with little room for manoeuvre around strict European rules.

Schäuble and other eurozone finance ministers met in the Belgian capital for the first time following Monday's breakthrough deal to keep Greece in the single currency.

Merkel's right-hand man was not in a conciliatory mood at a press conference after the talks, saying that he had “only conditional confidence” that a third bailout programme would resolve Greece's financial woes.

“It's about winning back, recreating a minimum of confidence” in the Greek government, Schäuble said.

“We have a very comprehensive programme in draft of structural reforms, and if it's implemented it's a way to bring Greece onto a much better path.”

Britain refuses to help

Ministers met in Brussels to discuss how Greece's short-term financial problems could be solved.

Some aid might have to come in the form of bilateral agreements between Athens and other governments.

Britain came in for a barrage of criticism in the German media on Tuesday after the country's treasury said that any attempt to chip in and help Greece was “a non-starter”.

“To be honest, I didn't need earplugs to bear the noise of the announcements of who's pushing to the front [to help],” Schäuble said.

Greece needs around €12 billion to pay its debts and keep banks afloat in the short term – at least four weeks, according to Schäuble - while the terms of a new aid package are hammered out.

Some of the money may be found from the profits from past European Central Bank loans to Greece, while the European Commission is checking whether money can be found from the EU budget.

IMF warns: debt relief needed

A confidential IMF report sent to leaders just hours after European leaders reached their agreement on Monday showed that Greece would need much more than the help that has already been offered, Reuters reported.

"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date," the authors write.

Previous IMF calls for debt relief - effectively cancelling a large amount of Greek debt in a so-called 'haircut' - have fallen on deaf ears in Europe, with Schäuble repeatedly saying that European treaties forbid it.

Other options proposed by the IMF include giving Greece a 30-year grace period on making debt repayments or other European countries simply giving Athens cash as payments come due.

The IMF warns that Greece will effectively be shut out from borrowing on the financial markets (by issuing bonds) well past the 2018 estimate of some EU officials.

One EU source told Reuters that the new figures on debt sustainability were known to the EU leaders before they reached Monday's deal.

Schäuble's thick skin

Despite Schäuble's insistence that he wants to end a situation “in which the Greek people are suffering very greatly,” he has come in for vicious attacks from caricaturists across Europe in recent days and months, often depicted as a Nazi, torturer or terrorist.

Bild asked on Tuesday how he was able to bear the hate directed at him from Greece and elsewhere.

 

 

 

 

 

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