German Finance Minister eyes growth measures for Greece
Monday, 14 May 2012 | 00:00
Germany is ready to consider additional measures to promote growth in Greece but the struggling economy must still carry out agreed reforms, German Finance Minister Wolfgang Schaeuble said in an interview with the Welt am Sonntag weekly on Saturday.
"If the Greeks have an idea of what we could do, in addition, to promote growth, we can always talk and think about this," Schaeuble was quoted as saying. "But ultimately it is about making Greece competitive again, allowing the economy to grow and opening the path to the financial markets again."
"That requires the agreed, fundamental reforms being carried out, otherwise the country has no prospects."
Germany on Friday said it supported a European "growth pact," an attempt to deflect criticism that its insistence on austerity has exacerbated Athens' debt woes.
But it also told Greece that staying in the euro zone was its own choice and that it must not stray from austerity if it expects to get international cash.
"I can understand the Greeks well ... they are suffering a lot," said Schaeuble. "There is no comfortable path for Greece."
"There is not a better solution. Greece must now show if it has the power to get the necessary majorities for this. I can only hope that those responsible in Greece will quickly see reason."
Greece was plunged into turmoil after a general election boosted far-left and far-right groups, stripping mainstream parties, which back a painful European Union/International Monetary Fund bailout, of their parliamentary majority.
But Germany, the EU's paymaster, and the European Commission have repeatedly insisted that Greece must persevere with tax hikes and spending cuts if it is to continue receiving funds under the 130 billion euro bailout.
Schaeuble said Germany did not want Greece to leave the euro zone but could not force the country to remain within the currency bloc either.
"Of course we do not want Greece to leave, that is quite clear and unambiguous. But ... we would be a strange government if we did not prepare ourselves for all thinkable scenarios, to then also be able to master them, including situations that would not be easy for Europe."
In a separate interview with Austrian daily Die Presse, the head of the European bailout fund said that a Greek exit from the euro zone would be "the most expensive solution for all involved", albeit less costly now than at the beginning of the currency bloc's sovereign debt crisis.
"At the beginning of the crisis it would have been more expensive. Now all market participants are better prepared for all eventualities," Klaus Regling, the head of the European Financial Stability Facility (EFSF) being used to finance Greece's second bailout, was quoted as saying.
"But it is still wise to help Greece. An exit from the euro would lead to the impoverishment of the country."
"It can and should not be indifferent to us if a country on our south-eastern flank ends in chaos," he added. "Even disregarding that central and west European banks would suffer considerable losses."
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