After IMF, Greece and USA, Germany conceded on Thursday that Greece would need some debt restructuring as part of any new loan program to make its economy viable. It wans’t German Chancellor Angela Merkel, bu the himself personally German Finance Minister Wolfgang Schaeuble who admitted so.
Schaeuble, who has made no secret of his scepticism about Greece’s fitness to remain in the currency area, told a conference in Frankfurt:
“Debt sustainability is not feasible without a haircut and I think the IMF is correct in saying that.
But Schaeuble would not be Schaeuble if he had not add:
“There cannot be a haircut because it would infringe the system of the European Union.”
According to Reuters, Schaeuble “offered no solution to the conundrum, which implied that Greece’s debt problem might not be soluble within the eurozone.
But he did say there was limited scope for “reprofiling” Greek debt by extending loan maturities, shaving interest rates and lengthening a moratorium on debt service payments.”
The admission by German Finance Minister Wolfgang Schaeuble came hours before a midnight deadline for Athens to submit a reform plan meant to convince European partners to give it another loan to save it from a possible exit from the euro.
Interesting to note that the admission by German Finance Minister Wolfgang Schaeuble came also four days after his arch-enemy Yanis Varoufakis resigned as Finance Minister.
Coincidence? I don’t think so.
In a rare moment of Freiburger humor*, FinMin Schaueble offered US-Treasury Secretary Jack Lew swap burdens of Puerto Rico with those of Greece.
“I offered my friend Jack Lew these days that we could take Puerto Rico into the euro zone if the U.S. were willing to take Greece into the dollar union,” Schaeuble said at an event in Frankfurt Thursday. Lew, the U.S. Treasury secretary, “thought that was a joke,” Schaeuble said.”
Last month, Puerto Rico‘s governor, Alejandro García Padilla, conceded that public debts of $72 billion are “not payable”.
Nevertheless, apparently several dozens lawmakers of Merkel/Schaeuble’s party CDU are collecting signatures to block any further aid to Greece but this is not our problem, for a change 🙂
PS *dahamwiederglacht – there we have laughted again