Schaeuble douses Greek hopes
German Finance Minister Wolfgang Schaeuble said yesterday that if the International Monetary Fund is not part of the Greek bailout then it would become obsolete, essentially dousing government hopes that the current program could continue without the Washington-based organization. “Should it not come to a successful second review [of the third bailout], and should the IMF draw the consequences from this, then the current program would be obsolete. The program was agreed to only on the expectation that the IMF would participate,” Schaeuble told the Wall Street Journal, adding that if it became obsolete, “then we would have a situation in which one would need to come up with something new. I wouldn’t recommend this to the Greek government.” “The German Bundestag would first need to discuss and agree on whether or not it approves negotiating a new program,” he said.
European Stability Mechanism Managing Director Klaus Regling sounded a similar warning, telling Bloomberg TV that without the IMF, there would need to be a fundamental change in the program, which the Bundestag would have to approve. Regling went on to say, however, that despite there being no agreement on all the issues, “we must not ignore” that progress has been made, while Eurogroup chief Jeroen Dijsselbloem appeared cautiously optimistic, saying that “things are going well with Greece,” adding that access to international markets in 2018 is a feasible target compared to 2017. But he was quick to remind that Greece’s debt mountain was due to the fact that Greeks had lived beyond their means since joining the euro.
Meanwhile, with the second review of the country’s third bailout still hanging in the balance, Athens is bent on finding a golden mean between what is ideal and feasible. Officially, Prime Minister Alexis Tsipras’s aides insist the leftist-led coalition has not abandoned the goal of wrapping up the review at the Eurogroup on January 27. But in reality Athens appears resigned to the fact that, as things stand now, a conclusion of the review over the next 10 days is a scenario which has slim chances of materializing.