- Greece, partners must meet program goals `in principle'
- France says Greece deserves solidarity and understanding
German Finance Minister Wolfgang Schaeuble said there’s leeway for Greece to meet the terms of its bailout review if Prime Minister Alexis Tsipras’s government can’t pass more cuts in retirement benefits.
As Greece struggles to deal with an influx of refugees and fulfill demands to stabilize its debt, Schaeuble suggested that the overseers of Greece’s third aid program take into account the opposition to pension reductions sought by the International Monetary Fund.
“It is likely that there will be no majority” in Greece’s parliament for further cuts in pensions, Schaeuble said at an event with French Minister Michel Sapin in Berlin on Monday. “To that extent, one is looking for a way to fulfill in principle what was agreed on in the summer.”
The migrant crisis has added to the challenges facing Greece, with more than 50,000 refugees currently stranded in the country in temporary facilities, according to government data released Monday. Delays in reaching a deal for the disbursement of the next installment of emergency loans from the euro area add to pressure on Greece as its economy struggles under capital controls imposed last year.
While Tsipras’s government acknowledges that the pension system isn’t sustainable, it has proposed alternatives including an increase in mandatory contributions by white-collar workers, employers and farmers.
Other euro-area countries recognize that pension reform is the most difficult part of the economic adjustment program agreed on as part of last year’s bailout, and Greece’s position on the European Union’s outer border means it faces particular refugee burdens, Schaeuble said.
While the latest talks between Greece and its creditors ended Sunday without an agreement on how to fulfill the terms attached to the bailout, the European Commission and the IMF said talks are moving in the right direction. Work will continue over the next two weeks and bailout monitors will return to Athens on April 2.
Sapin said Greece made progress on meeting the conditions of its bailout program despite being in a difficult position because of the refugee crisis. The EU must show its solidarity with and understanding for Greece, which faces unplanned expenditures because of the refugee influx, Sapin said, citing pension, taxation and caring for refugees.