Herewith we ascertain a change in the strict German position which was summarized into a short and firm “no economic concessions to Greeks”. German Chancellor Angela Merkel now pleads to an extension of Greek debt maturities and rejects restructuring of Greek debt. It looks as if the express visit by US Treasury Secretary Timothy Geithner in Berlin did indeed assisted the Germans to take a step back and facilitate the situation. Of course, we will wait and see what will happen on Friday during the €UROGROUP meeting in Brussels.
Angela Merkel said all these important things in an interview to be published by German newspaper Bild, Dow Jones (via smartmoney in English) reported.
A bailout program for Greece set up in May 2010 is scheduled to run out in 2013.
However, Merkel rejected a restructuring of Greek debt, telling the newspaper “no instruments” for that were available. “But in case of an insolvenz after 2013 private creditors should be called upon.”
The German Chancellor also said further aid for euro-zone countries needs to be linked to strict conditions and that Germany will veto future bailouts if prerequisites for aid aren’t given.
Any future bailout also needs to be decided upon by all euro-zone countries, Merkel is quoted as saying.
Euro-zone government leaders meet in Brussels Friday to debate stricter rules on budget discipline, a strengthening of a temporary fund to bailout troubled euro-zone members, and details for a future permanent rescue fund.
Here you can read the German Version of the Dow Jones news wire.
However before applouding, we should wait and see what Angela Merkel will put in the middle of the negotiation table.
Bloomberg reports of Merkel’s first bite:
“German Chancellor Angela Merkel told lawmakers she would back lower interest rates for emergency loans if Greece agrees to sell state assets and Ireland backs a common corporate tax base in the euro region.”
Unfortunately Greeks consider state assets as items of national pride…. So Greek Prime Minister George Papandreou is correct to claim “the negotiation is difficult”. Does he have any other idea on how to come up with at least 50 billion euros until 2015? Citizens’ pockets and wallets are empty.