Germany’s message to Athens
Bundestag approves final tranche disbursement, but demands a say on central bank earnings’ return
Germany yesterday sent Greece a new message that it will continue to strictly monitor the country, as it attached a significant note to the German parliament’s decision to lift its block on the last bailout tranche to Athens.
While German MPs voted for the disbursement of the 15 billion euros to Greece, they also voted for a proposal which requires that the Bundestag issue its consent each time the earnings of national central banks’ earnings from Greek bond holdings are due to be forwarded to Athens in the coming years.
That is one of the debt relief measures that depend on the implementation of reforms by Greece that the Eurogroup has decided to apply. It was a given that the earnings of Germany’s central bank to be returned to Greece would have to be reflected in the German state budget.
Yet obviously the German deputies wanted something more than that: A parliamentary official told German state broadcaster Deutsche Welle yesterday that this was a symbolic decision with which government coalition MPs wanted to send a message to Greece that in future it should continue to stick to the pledges it has made.
Along with the abolition of the step-up interest rate margin of the second bailout’s loans, the Eurogroup also decided that the earnings of eurozone national central banks to be returned to Greece amount to 4.8 billion euros and will be disbursed in six-month tranches up to 2022.
At the July 12 Eurogroup Germany had blocked the payment of the 15billion-euro tranche to Greece because the government had unilaterally decided to extend the valueadded tax discount on five Aegean islands that are suffering due to migrant flows for an extra six months.
German Finance Minister Olaf Scholz told Deutsche Welle’s Greek program that “support was granted to the measures that remain necessary for Greece, so that the program can be concluded and Greece can stand on its own two feet in the future.”
According to a eurozone official, “we are now expecting the European Stability Mechanism to disburse the 15 billion euros to Greece within the next few days.”