Feb. 10 (Bloomberg) -- Germany pressed the Greek government to stay the course on deeper budget cuts needed to unlock its second bailout as members of Prime Minister Lucas Papademos’s Cabinet defected.
“Nothing has changed,” Steffen Seibert, Chancellor Angela Merkel’s chief spokesman, said in a text message today. “Debt sustainability can only be reached if Greece makes these efforts on its own.”
Seibert commented after two ministers and three deputies said they were quitting the Cabinet in Athens to protest steps needed for the 130 billion-euro ($171 billion) rescue worked out with European officials and the International Monetary Fund. Papademos held a meeting of his ministers this evening to discuss a bill detailing the austerity measures to be put to a parliamentary vote this weekend.
German Finance Minister Wolfgang Schaeuble told lawmakers in Merkel’s Christian Democratic bloc earlier today that current plans don’t go far enough, leaving Greece’s debt as high as 136 percent of gross domestic product by 2020, according to two people who attended the meeting in Berlin. That compares with the 120 percent foreseen in the country’s second bailout. Debt was about 160 percent of GDP last year.
“The Greek offer is not sufficient and they have to go away to come up with a revised plan,” Bertrand Benoit, a spokesman for the German Finance Ministry, said by telephone.
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