Schaeu­ble turns up heat

Ger­man FinMin warns Athens that new bailout deal without IMF not ac­cept­able

Kathimerini English - - Front Page -

Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble turned up the heat on the Greek govern­ment yes­ter­day, warn­ing in an in­ter­view that if Athens and its cred­i­tors con­clude the sec­ond re­view of the coun­try’s bailout without the par­tic­i­pa­tion of the In­ter­na­tional Mon­e­tary Fund then it will be highly un­likely that the Ger­man par­lia­ment will ap­prove another pro­gram to re­place the cur­rent one.

Speaking to Bloomberg at the World Eco­nomic Fo­rum in Davos, Schaeu­ble said that Greek pro­gram was from “its be­gin­ning in 2010 based on the par­tic­i­pa­tion of the IMF” and that he wouldn’t sup­port a new Greek bailout if the Wash­ing­ton-based or­ga­ni­za­tion re­fused to join the ex­ist­ing pro­gram – that will be a sign, he said, that the Greeks are not ful­fill­ing their com­mit­ments, and there­fore “the pro­gram will be ended be­cause the pre­con­di­tion of the pro­gram, the ba­sis, is de­stroyed.”

If the IMF was to with­draw, then the Ger­man Bun­destag would as­sume that the pro­gram it ap­proved in July 2015 is no longer valid and a new one would have to be agreed. This would need fresh ap­proval from the par­lia­ment in Ber­lin, which, Schaeu­ble said, is un­likely, re­it­er­at­ing ear­lier com­ments to the ef­fect that he would not ad­vise Greece to “try to get the per­mis­sion of the Ger­man par­lia­ment” – es­sen­tially dis­miss­ing Athens’s as­sess­ment, that the IMF’s with­drawal would help ne­go­ti­a­tions along.

Ger­man law­mak­ers, he ar­gued, would con­tend that since Greek au­thor­i­ties are not able, with all the “flex­i­bil­ity granted by Euro­pean in­sti­tu­tions, to stick to what they have ap­proved, the pre­con­di­tion for a pro­gram is no longer there.”

Dif­fer­ences over la­bor re­forms and fis­cal tar­gets have stalled ef­forts by Greece and its cred­i­tors to con­clude a com­pli­ance re­view of its bailout pro­gram.

The IMF has in­sisted that Greece’s bud­getary tar­gets are un­re­al­is­tic, say­ing that they could only be met with fis­cal aus­ter­ity which, how­ever, will kill growth. Given that the re­view ne­go­ti­a­tions have es­sen­tially frozen, Schaeu­ble’s com­ments are an alarm call to the Greek govern­ment to push for their swift con­clu­sion and ac­cept the de­mands made by the IMF.

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