Schaeu­ble douses Greek hopes

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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.

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