Despite all the denials, there is a growing realization that a so-called haircut for Greece’s debt can no longer be avoided, reports DER SPIEGEL. The German weekly claims that Germany is opposed to giving Greece any more financial aid and therefore Athens will have little choice but to restructure its debt. Last week DER SPIEGEL claimed that the IMF is putting pressure on Athens to restructure its debt – a claim dismissed by the EU and the IMF itself. However SPIEGEL insists and this time includes in its pro debt restructure argument several statements by German politicians.
Germany Unwilling to Provide More Aid for Greece
The only other possible alternative to a controlled default for Greece is additional financial aid for the country. But Wolfgang Schäuble (Germany’s Finance Minister) has already made it clear to Jean-Claude Trichet (ECB Chief) that he is highly unwilling to grant the Greeks another round of help.
Schäuble justifies his refusal with the argument that he would never get additional aid for Greece through the Bundestag, the lower house of Germany’s parliament. Indeed, resistance to providing Greece with any more help is particularly pronounced among members of the business-friendly Free Democratic Party (FDP), which governs in Berlin as the junior partner in a coalition with Chancellor Angela Merkel’s center-right Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU). “In the interest of the German taxpayer, Greece cannot be allowed to receive even more money from its European partner countries,” says Volker Wissing, an FDP politician who is head of the Bundestag’s finance committee.
The opposition is also concerned. “In the light of the underlying economic data, Greece will not be able to survive in the medium term without restructuring its debt,” says Carsten Schneider, budget spokesman for the parliamentary group of the center-left Social Democratic Party (SPD). He adds that it is no longer justifiable to use “taxpayer money to relieve banks and other private creditors by extending public loans to Greece.”
At least this time DER SPIEGEL did not quote …”anonymous sources“.
Read Full Spiegel Article in English : The Never-Ending Crisis/Greek Debt Restructuring Looks Inevitable