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Germany's Schaeuble casts doubt on chance of Greek bailout success

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Germany's Schaeuble casts doubt on chance of Greek bailout success


German Finance Minister Wolfgang Schaeuble questioned whether Greece will ever get a third bailout programme on Thursday, a day after the Greek parliament passed a package of stringent measures required to open negotiations on financial aid.

He said he would submit a request to Germany’s parliament to vote on opening the talks and said passing the reforms was an “important step”, but it would be hard to make Greece’s debt sustainable without writing some of it off, an idea Berlin considers to be illegal.

Greece is seeking up to 86 billion euros in a third rescue package in return for tougher austerity measures and structural reforms.

“We will now see in the negotiations whether there is even a way to get to a new programme taking into account (Greece’s) financing needs, which have risen incredibly,” he told Deutschlandfunk radio on Thursday.

The International Monetary Fund is leading calls for a deep reduction in Greece’s debt but Germany, the biggest contributor to the euro zone’s bailout funds, has ruled one out.

Schaeuble, a member of the centre-right Christian Democrats, the party of Chancellor Angela Merkel where there is strong resistance to a new bailout for Greece, said such a step would not be compatible with membership of the currency union.

“But this would perhaps be the better way for Greece,” he said.

Germany’s tough line with Athens has made some of its European partners uncomfortable

In the strongest open criticism yet, Austrian Chancellor Werner Faymann, a centre-left social democrat, said the view of Schaueble that it might be better for Greece to leave the euro was “totally wrong”.

“Finance Minister Schaeuble created the impression for some that it may be useful for us if Greece falls out of the currency union, that maybe we pay less that way,” Faymann said in an interview with Austrian newspaper Der Standard published on Thursday.

“I think this is totally wrong. It’s morally not right, that would be the beginning of a process of decay … Germany has taken on a leading role here in Europe and in this case not a positive one.”


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