German finance minister Wolfgang Schäuble has upped the ante with Athens, warning that Greek politicians alone are to blame if the country cannot pay bonds due this week.
Today’s euro group meeting in Brussels would not be able to agree on further financial assistance, Mr Schäuble said, not because of a lack of solidarity but because of foot-dragging in Greece.
On Friday Athens needs €5 billion to pay off short-term treasury bills. But the EU-ECB-IMF troika has to decide if Greece is adhering to the terms of its two assistance programmes before it releases the next €31.5 billion financing tranche.
“No one in the euro zone has a problem agreeing to the next tranche – but only if the conditions are met, something the Greek government has to take care of,” Mr Schäuble told Welt am Sonntag newspaper yesterday.
The Greek parliament agreed reform measures on Wednesday and yesterday voted on the 2013 budget, which foresees economic shrinkage of 4.5 per cent next year, after 6.5 per cent this year.
Mr Schäuble said these measures should have been agreed in June, delaying examination by the troika and approval by each member state for their contribution to the next tranche .
“We are not responsible for the time pressure. Everyone has known the dates for a long time,” he said. “We all of us in the euro group and IMF want to help Greece, but we don’t allow ourselves to be put under pressure.”
Sympathy
In a lengthy interview, Mr Schäuble expressed sympathy for ordinary Greeks who were being asked to make considerable sacrifices, noting that many rich Greeks paid no taxes.
“But let’s be realistic: the country cannot be reformed with the taxes of a few wealthy people.
“A painful and thorough adjustment process is necessary to reform the country,” he said. “That is painful, partly unjust . . . but unavoidable.”
He rejected criticism that the Greek programme was too austerity-heavy.
The continued shrinking of the Greek economy, he said, was not down to too much austerity but to a failure to implement agreed measures.
While Mr Schäuble meets his euro zone colleagues in Brussels, German chancellor Angela Merkel makes her first trip to Lisbon since Portugal entered an EU-IMF programme last year.
Dr Merkel will meet Portuguese president Aníbal Cavaco Silva and prime minister Pedro Passos Coelho, and participate in a business event with German and Portuguese company managers.
