German Finance Minister Wolfgang Schaeuble is making contingency plans for a breakdown in aid talks with Greece, lawmakers said, signaling that Germany is preparing for a possible Greek default.
Schaeuble told the lower house’s Finance Committee that, while he remains hopeful Greece and its creditors will reach an aid agreement by June 30, the German government is also preparing for failure, according to two lawmakers who were present. Both asked not to be identified because the meeting on Thursday was held behind closed doors.
Schaeuble said a Greek default on European aid loans wouldn’t have an immediate impact on Germany’s budget, the lawmakers said. All the same, he’d have to make a formal statement to parliament that Germany needs to cover its share of the losses, the lawmakers quoted him as saying. Schaeuble declined to comment to reporters after the meeting in Berlin.
The comments reflect the intensifying antagonism between Greece and its creditors that’s raising the specter of default and the country’s exit from the 19-nation euro area. Greek Prime Minister Alexis Tsipras said Thursday he’s ready to take responsibility for rejecting the terms of an aid deal if creditors demand a continuation of “catastrophic policies.”
A four-month extension of Greece’s aid program with the European Commission, the European Central Bank and the International Monetary Fund expires June 30. Chancellor Angela Merkel’s government and lawmakers in her Christian Democrat-led bloc are putting the onus on Tsipras to make concessions.
“We can’t offer further compromises,” Eckhardt Rehberg, a Christian Democratic lawmaker on parliament’s Budget Committee, said in an interview. “It’s the Greek people, ordinary citizens, who will have the biggest problems if there’s a default, with no agreement or solution.”