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German FinMin Scholz to block €970mn for Greece at Eurogroup

German finance minister Olaf Scholz (SPD) plans to block the release of 970 million euros for Greece at the Eurogroup meeting in Brussels on Monday.

According to an internal memo of the German Finance Ministry obtained by daily Handelsblatt, the Eurogroup should postpone its decision [for the money release] at the next meeting on April 5.

“There is no time pressure,” the memo notes implying that  Athens does not need the money urgently as the government has liquidity reserves of almost 27 billion euros. Berlin wants to postpone the money release until Greece complies with five remaining structural reforms, including privatization, red loans and others.

Part of the 970 million euros, 640 million, are earnings the European Central Bank and some banks in the eurozone have gained form the Greek bonds. Another part, 330 million, is repayment of interest.

While Scholz plans to urge the eurozone finance ministers to postpone the release, Handelsblatt lists two scenarios: 1. a new positive report about Greece’s reforms 2. only part of the 970 million euros will be released, and the rest is withheld until Greece fully complies with the European lenders’ terms and conditions.

As long as the criticism of the European Commission and the ECB is not cleared, there should be “no political agreement,” on the money release, the Ministry memo stresses.

What is interesting is that Handelsblatt and apparently the German Finance Ministry describe the money lenders ought to return to Greece as “debt relief measures.”

It is also interesting to note that Germany keeps on behaving as “the absolute ruler of the Eurozone,” even thought this is one of the facts that has triggered euro-skepticism across Europe.

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  1. What privatisation is still to be completed? Is this referring to more Greek assets being sold at knockdown prices to mainly German companies?