Follow Us

Follow us on Twitter  Follow us on LinkedIn

02 September 2013

SZ: Schäuble admits Greece will need at least €4 billion in extra funds in 2014

Default: Change to:

German Finance Minister Wolfgang Schäuble admitted that Greece needed at least €4 billion to plug a financial gap in 2014, but at the same time rejected retroactive direct recapitalisation of banks by the ESM.

Translated from the German

Speaking at a meeting of the Bundestag's Budget Committee, he quoted as a reason for Greece' situation the sluggish privatisation and problems with profit repatriation to Athens from national central banks buying Greek bonds.

Schäuble did not state any exact figures concerning the size of the possible financial gap as the situation was in flux and detailes changed constantly. According to other participants of the meeting, however, the potential gap was estimated to amount to €4.5 billion by the end of 2014. This sum has also already been talked about by the International Monetary Fund (IMF) for weeks. For 2015, the IMF expects another financial gap of further €6.5 billion.

What remains unclear, however, is how great the financial requirements of a possible third rescue package for Athens after 2014 might be. The Greek Finance Minister, Yannis Stournarnas,  had last spoken of a total of about €10 billion. Should the economy continue to drop, however, even these estimates could prove too optimistic.

Schäuble confirmed at the meeting that there might still be limited residual financing needs by the end of 2014. This would be tested in mid-2014 and responded to accordingly, he said. So far, it was scheduled that Greece should again be able to secure loans for itself in 2015 - but it does not currently seem likely that the country's economy then will be strong enough.

In a recent interview with Badisches Tagblatt, he also categorically ruled out a second write-down for Greece. He stated: "We cannot allow a second debt write-down for Greece. After the first write-down, the heads of state and government in the European Council solemnly pledged that the debt cut was a one-time measure. And it’s going to stay that way, especially since Greece doesn’t need another one."

The troika of lenders, the IMF, European Commission and European Central Bank will again evaluate the progress of the programme in Greece in late September and then decide on the size of a possible third rescue package for Greece. Only a few weeks ago, this year's goal to get approximately €2.5 billion from privatisations had been corrected down to €1.6 billion. Greek Prime Minister Antonis Samaras and his Finance Minister stressed in the newspaper Kathimerini that they want to avoid having to implement new austerity measures. German Chancellor Angela Merkel, however, had said during the TV duel with her contender on Sunday evening: "I as Chancellor have the reponsibility to ensure that the pressure on Greece to implement reform does not decrease".

Full article (in German)

Full interview (in English) © Badisches Tagblatt, Bundesfinanzministerium

© Süddeutsche Zeitung GmbH

< Next Previous >
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information

Add new comment