Germans, Dutch Signal Greece’s Euro Future Still to Be Resolved
Germany and the Netherlands signaled that Greece’s future in the euro is not yet assured, as the northern neighbors sought to maintain pressure on Greek Prime Minister Antonis Samaras to hold to agreed reforms.
“It’s not yet decided,” German Finance Minister Wolfgang Schaeuble said in an interview with ZDF television, according to extracts e-mailed yesterday. “We want Greece to be able to stay in the euro zone. But Greece has a lot to do.”
Schaeuble’s Dutch colleague, acting Finance Minister Jan Kees de Jager, told reporters in The Hague the Netherlands is “against any delay in the measures the country should take.” While any lag forced by a worsening Greek economy “is something different,” it cannot lead to a third aid program, De Jager said. “We should wait for the report of the troika” of creditors, he said. “Greece must bear the costs of any delay.”
The dual message is a rebuke to Greek Finance Minister Yannis Stournaras, who triggered investor confusion on Oct. 24 when he told lawmakers in Athens that Greece had won approval for its bid to secure a two-year extension to 2016 for its bailout program. The European Commission and European Central Bank, two-thirds of the so-called troika examining Greece’s progress in meeting the terms of its bailout, denied that a deal had been struck, saying their review is not yet complete.
German Chancellor Angela Merkel, whose country is the biggest contributor to Greece’s 130 billion-euro ($168 billion) bailout, said in August when Samaras visited Berlin that she was “deeply convinced” his government would “do what it takes to solve the problem in Greece.”
Yet Schaeuble said that “doubts persist as to whether Greece has been able to meet its obligations,” according to the ZDF interview to be broadcast on Oct. 30. “These doubts have to be dispelled from now on.”
European policy makers are awaiting the report on Greece’s progress in meeting internationally agreed targets compiled by the troika of the EU Commission, the ECB and the International Monetary Fund. The German Finance Ministry said yesterday that it didn’t know when the report will be complete.
IMF Managing Director Christine Lagarde is due to meet with French President Francois Hollande in Paris on Oct. 29 before traveling to Berlin for talks with Merkel the following day. Euro-area finance ministers will then hold a conference call on Oct. 31, a spokesman for Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of finance chiefs, said by e-mail.
Citigroup Inc. Chief Economist Willem Buiter said there needs to be a write-off of Greece’s debt so that officials can focus on reviving economic growth, even after Citigroup “tempered” its forecast for Greece leaving the euro.
“I myself continue to be unconvinced that the funding, the non-market funding, necessary to keep Greece on board will be available,” Buiter said in an interview on “Bloomberg Surveillance” with Tom Keene and Sara Eisen in New York yesterday. “It can only come from the official creditors or from the ECB and neither of them seem to be willing to play.”
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