No debt relief for Greece: Germany’s Schaeuble

Germany’s disciplinarian Finance Minister, Wolfgang Schaeuble, has rebuffed a report saying the International Monetary Fund (IMF) was insisting on more debt relief for Greece, saying that the country has not fulfilled any of the prerequisites needed for such a measure.

Speaking to foreign reporters in Berlin, Schaeuble said that the IMF had warned recently that Greek’s financial situation was worsening, but denied a report in the Financial Times that signalled the fund was insisting on further debt relief.

Schaeuble rejected the newspaper’s report that said IMF official Poul Thomsen had told euro zone finance ministers at a recent meeting in Riga that returning Greece to a sustainable debt path would require debt relief.

“The IMF of course did not make such a comment,” Schaeuble said, according to Reuters, although he admitted that Thomson had said Greek debt reduction was a challenge.

“Poul Thomson has pointed out that there are effects on the debt sustainability by the worsening economic situation in Greece. That is one of the difficult topics in the ongoing talks between the Greek government and the institution,” Schaeuble said.

He added, however, that Greece did not fulfil any conditions for a debt haircut – a moot point for a country struggling under the weight of its debt obligations to international lenders.

“We have said in the past that by 2015 if Greece has accomplished the program, which is not the case as we have extended it, we could consider it,” he said

“The prerequisite was the accomplishment of the program, with a primary surplus and that Greece in general would have fulfilled its obligation and would need more financing, in that case we would have raised the option. But you see all these three prerequisites have not been met.”

Schaeuble’s remarks come at a time of deepening concern for Greece – a country rapidly running out of cash and facing huge loan repayments to the IMF — among euro zone finance ministers and officials. Italian Finance Minister, Pier Carlo Padoan, told CNBC Monday that Greece could soon run out of money.

“Liquidity is running out in Greece , it’s a matter of a couple of weeks and the Greek authorities have to come up with concrete reform proposals that the Eurogroup (of euro zone finance ministers) will have to validate,” he said.

Padoan said he was confident, however, that at the next meeting of the Eurogroup on May 11, there would be “tangible results” so that Greece would be able to receive a final tranche of aid worth 7.2 billion euros.


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Former Craig

Former Craig

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.