The Bavarian Minister of Finance, Markus Soeder (CSU), a fierce Grexit supporter of Merkel’s CDU sister party apparently has moved away from his demand for a Greek euro exit. During a visit to Athens, Soeder said that the problems around Britain’s exit from the EU showed how difficult a Grexit would be. In addition, the Brexit already causes enough uncertainty. and Germany wants neither problems, nor uncertainty that could harm its profits especially before the parliamentary elections in autumn 2017. As Grexit is out of question, then Greece should use gold reserves and real estate as collateral if the IMF stays out of the Greek program.
However, Markus Soeder brought back an older idea of his, an idea he openly formulated in February 2017: that Greece pledges Gold, cash and real estates in order to get the bailout tranches, the loans by the European creditors, who love to call them financial aid.
“Soeder did not give up serious demands on Greece wile he was in Athens,” German magazine Der Spiegel writes.
If the International Monetary Fund (IMF) does not participate in the Greek program, “new money can only be provided against collateral such as cash or real estate,” Soeder said.
Soeder referred to Finland that participated in the second aid package for Greece only in 2012 and only after then Greek finance minister Evangelos Venizelos signed a bilateral agreement on colateral.
“This worked,” the CSU politician said about the deal.
Soeder’s demand is, however, amply theoretical, since he continues to regard an IMF participation as indispensable. He has the same problem as Federal Minister of Finance Wolfgang Schäuble (CDU): He strongly rejects further debt relief, as the IMF makes it a condition.
“I have made it quite clear that a debt cut is out of question for Germany, as it the idea about issuing Eurobonds or similar.”
Issuing Eurobonds is also on the agenda of newly President-elect Emmanuel Macron.
“I believe it is possible that the IMF remains on board and there is no debt cut,” Soeder said. However, he left unanswered the question of how such an agreement could be reached.
The big question to Soeder’s Greek collateral is the approach of the German finance ministry. Will Schaeuble adopt such an idea if the IFM remains out of the program?
So far, Berlin insists that the discussion on Greek debt relief cannot start before 2018. The German insistence is obviously based on the indications that Schaeuble will not serve as finance minister even if Merkel and CDU win the elections. By 2018, Schaeuble will have trained his successor perfectly well to deal with the Greek problem.