Published: Feb 05, 2015 – 1:20 PM
The debt programs since 2010 have simply been a case of “extend and pretend”, rather than fixing the problem, Greece’s Finance Minister Varoufakis said after meeting his German counterpart on Thursday, while Wolfgang Schaeuble argued that there’s “nothing wrong with politicians delivering on election pledges, unless they are at odds with a country’s commitments.”
by Lubica Schulczova
Berlin – All European countries have suffered since the financial crisis and the most difficult journey in this process falls to Greece, German Finance Minister Wolfgang Schaeuble said after meeting his Greek colleague Yanis Varoufakis in Berlin on Thursday, setting the tone of the news conference.
“We must understand how difficult it is for people in Greece – we must appreciate their efforts and progress…(but) Greece’s situation today is primarily caused by Greece’s own problems,” Schaeuble said, while noting the progress Greece has made so far. “Greece is making progress,” Schaeuble said, citing falling unemployment and the creation of a primary budget. surplus.
Germany offers help
However, Greece has to go further and “reforms and investment are indispensable,” including reforms of the country’s tax system.
“The measures announced by Greece are going in the right direction…wealthy people must pay their fair share of taxes, corruption must be rooted out,” German Finance Minister said, offering Germany’s expertise and repeating his offer to send 500 German tax officers to Greece. That offer wasn’t taken up before (by the previous Greek government), but it’s still on the table.
However, on the issue of debt relief “we went as far as we could last time”, Schaeuble said. “We can only provide help for people to help themselves. A new agreement would need the agreement of all parties involved…and the question is how can Greece gain access to the markets without a continuation of its program? We didn’t get an outcome today.”
“I think we agreed that a [debt] haircut is not on the agenda, it’s off the table,” Schaeuble concluded.
Time to put an end to the “gross indignity”
On the other side, Varoufakis said that they didn’t discuss Greece’s debt schedule. “Instead, we set the scene for deliberations for an approach that will end this seemingly never-ending crisis, that began in Greece and spread across the eurozone.” He added that the German people want an end to the crisis too.
“My message to the people of Germany is simply – you can expect a frenzy of reasonableness from Greece. We will bring policies that help the average European. Expect from us an unwavering commitment to telling it as it is….sound macroeconomic analysis and reforms that work,” Varoufakis stressed with vigor. “These are our commitments.”
However, the Greek minister warned about the consequences of strict austerity measures and the impact they have made in Greek society. “When I return home tonight, I will find a party where the third-largest party is not a Neo-Nazi party, but a Nazi party,” Varoufakis said.
Personal statements on future of Europe
In an unusual gesture, Wolfgang Schaeuble decided to make a “personal statement” expressing his fears concerning the European future and unity: “I have been involved in European politics for years, for decades. The lesson of history is that a common Europe is the best thing for the region….I am worried that support for an integrated Europe is “slackening”.
“We are both in favor of European integration, we want a strong Europe, that has clout and stands its ground in the world”, German Finance Minister Wolfgang Schaeuble said.
Varoufakis responded with an equally strong claim: “Europe is at a crossroads – it must find a way to maintain its rules without crushing the flower of democracy with statements like ‘Elections do not change anything’.”
Greece’s Finance Minister Yanis Varoufakis’ meeting with his German counterpart Wolfgang Schaeuble in Berlin on Thursday was partly overshadowed by a dramatic decision by the European Central Bank (ECB) in Frankfurt.
The ECB shocked financial markets on Wednesday evening with renewed pressure on Athens, by announcing that it will no longer accept Greek bonds as collateral from banks for loans, saying that “the Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the (bailout) program review and is in line with existing Eurosystem rules.”
“Greece does not aim to blackmail anyone but will not be blackmailed either,” a Greek government official said in a statement. “The ECB’s decision…is an act of political pressure to quickly reach a deal.”
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