Athens.- (GreekNewsOnline, ANA-MPA, Reuters)
German Finance Minister Wolfgang Schaeuble in an interview with “Ta Nea” newspaper on Saturday said that he will be glad when Greece returns to the markets and is not dependent on additional financial aid. As he said, this must be achieved by the middle of the next year. He estimated that the Greek debt is not a problem right now because Greece does not pay interest for long periods and has low interest rates. In the future, however, the debt may be a problem for Greece and this is when it must be discussed.
“We will try to make the return to the markets feasible and when the Greek economy is not longer dependent on economic aid, we will see whether further steps are needed,” he stated.
Schaeuble said that he has sympathy for the Greek people because it bears great burdens, but the solution to the problems lies within the improvement of the conditions in the country. He also stated that it is not right to blame the others for what Greece is experiencing.
Asked whether the situation in Greece can be compared to the situation in Germany in 1953, Schaeuble said: The situation in Greece, fortunately, is not comparable to Germany after World War II. Greece receives ESM assistance with the same terms like all the other countries. All these countries succeeded in returning to the markets after a programme. Greece is now running the third programme.”
Moreover, the German Finance Minister clarified that the third programme is the last one with the participation of the IMF.
“We have all acknowledged (eurozone and IMF) that the third Greek (bailout) payment will be the last with the participation of the IMF,” Wolfgang Schaeuble told Greek daily Ta Nea.
The German finance chief has been inflexible on the issue of Greek debt relief, in opposition to the IMF which says it needs to be done to breathe new life into Greece´s floundering economy.
Agreement was reached last month to pay the third tranche of Greece´s 86-billion euro ($97-billion) bailout, after being held up for months by a row over its need for debt relief which has pitted bailout-weary Germany against the IMF.
After participating in two previous international loans to save Greece from bankruptcy, the IMF is still set to take part in a third bailout.
But for the moment, it has held back its contribution over the issue of whether the eurozone will decide to ease Greek debt — currently at 180 percent of gross domestic product (GDP). Since 2010, the international bailouts accompanied by tough austerity measures “have obtained some results but have not resolved the problem,” said Schaeuble, who hopes a solution can be reached by the end of the current programme in 2018.
Under pressure especially from Berlin, Greece´s 18 other euro partners have not yet broached the issue of debt relief, preferring to push that hot-button topic to next year.
But IMF chief Christine Lagarde has warned that Greece´s debt is not sustainable and that the country requires significant debt relief from Europe.
In the interview, Schaeuble pointed to the European Stability Mechanism (ESM), a bailout fund for eurozone countries, as a way to respond to the future needs of countries sharing the single currency. Meanwhile, in another Greek newspaper, ESM chief Klaus Regling appeared to share that view, saying there is “a discussion in Europe on reinforcing the monetary union.”
Speaking to the Efimerida ton syntakton (Journal of Editors), Regling said the eurozone had to become “less vulnerable” and that he was certain that “the ESM will play a very important role” if a new financial crisis arises.
“We can assume some of the responsibilities the IMF has undertaken over these past few years and I think there is a wide consensus for that in the future,” he said.
“If the reforms continue over the next 14 months, Greece will be able to return to the international markets,” he added.
ECB to inspect Greek banks’
progress on cutting bad loans
The European Central Bank plans to inspect Greek banks this year to monitor their progress in working off their huge pile of unpaid loans, ECB director Sabine Lautenschlaeger said on Friday.
Greek banks have been cutting their share of non-performing loans (NPL) to companies and households, which account for slightly more than half of their books as a result of a severe economic crisis, to meet targets set by the ECB.
The ECB supervises Greece’s four largest banks, or significant institutions (SIs), and is one of the three bodies responsible for the country’s bailout, along with the European Commission and the International Monetary Fund.
“The ECB will perform on-site missions at the Greek SIs during the second half of 2017, a period in which the main operational measures to address NPLs … have to be already implemented,” Lautenschlaeger said in a letter to IMF chief Christine Lagarde.
She was responding to an IMF request for information on the ECB’s supervisory work in Greece in the context of a possible IMF programme for the country.
Greece secured a credit lifeline from euro zone governments earlier this month. The IMF offered Athens a standby arrangement but said it won’t disburse any money until it obtains greater detail on debt relief for the country.