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English | دری

No more Leeway to Greece from Germany

in International Business

No more Leeway to Greece from Germany

Germany puts pressure on Greece to stick to its bailout conditions within the time limit given to them.

Greece is expected to ask for more time to make cuts through austerity measures; however, some politicians Germany has opposed giving more leeway to Greece.

Michael Fuch, deputy chairman of German Chancellor Angela Merkel’s CDU parliamentary group, said his faction would not give Greece the two-year extension it wants on its austerity programs.

“We think that it’s enough time and it’s very difficult for us to explain to our constituencies in light of next year’s elections why we are giving them more time.”

“I really think Greece has to find a solution for themselves first before we can help them anymore.”

Greece, in order to avoid a default, needs the second installment, USD 38.3bn, of its major international bailout.

The final decision on the release of the second installment depends on an assessment of Greece’s progress towards cutting its deficit being carried out by the group of lenders known as the troika, composed of the European Commission (EC), the International Monetary Fund (IMF), and the European Central Bank (ECB).

There also fears of Greece exit from the Eurozone, something not very much discussed openly.

Finnish government had once publicly discussed a possible Greek exit in fear of Greece failing to meet its bailout targets.

The German foreign minister Gudio Westerwelle, despite putting pressure on Greece, pledged support for Greece staying within the Eurozone.

“The German government wants us to remain together in the Eurozone [but] the key to success lies in Athens,” he said.

When asked about a possible break-up of the euro he said: “This is something that everyone… is looking into but it is not something that can or should be discussed openly,” he said.

Stuck in recession, Greece is heavily in debt and has implemented more than 43bn euros worth of austerity measures since 2010 in order to try to bring down its budget deficit.

On one hand Greece looks for a softening of the bailout terms, on the other hand German government is refusing to give any further flexibility.



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