Home Business Banking Schaeuble Says Greece Needs 3d Bailout

Schaeuble Says Greece Needs 3d Bailout

German Finance Minister Schaeuble gestures as he addresses a news conference to presents 2014 federal budget bill in BerlinGerman Finance Minister Wolfgang Schaeuble said on Aug. 20 during a campaign stop to help Chancellor Angela Merkel’s re-election bid next month that two bailouts of $325 billion from international lenders to prop up Greece haven’t worked and that a third will be needed.

“There will have to be another program in Greece,” he told an audience, an announcement that comes at a critical time for Merkel who has repeatedly said Greece would be okay. Germany is the biggest contributor to the rescue aid packages for Greece.

Schaeuble has said in the past that international lenders may have to consider a new aid program for Greece after the existing one runs out at the end of 2014, but he has never described it as inevitable until now.

Earlier this month, the German government dismissed a report by Der Spiegel magazine which cited a report that Germany’s central bank, the Bundesbank, said that Greece would need more aid but now Schaeuble has admitted it.

Schaeuble, however, insisted again that Greece would not be allowed to give a so-called “haircut” to the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and impose losses that would have to be paid for by taxpayers in the other 16 countries of the Eurozone, including Germany.

Greece in 2011 hit private investors, including those in the Diaspora and Cypriot banks that nearly went bankrupt, with 74 percent losses in a desperate bid to write down its debt accumulated by decades of wild overspending and packing public payrolls with hundreds of thousands of needless workers in return for votes.

Schaeuble didnt’ specify how much would be needed but Greek officials reportedly said it would be less than either of the first bailout of $152 billion or the second for $173 billion.

In Athens, a Greek finance ministry official told Reuters a new bailout would focus on plugging an expected funding shortfall over 2014-2016.”Greece and its lenders are examining several ways to plug any funding gap that Greece will face over the next few years,” the official said on condition of anonymity.

The IMF earlier had said there could be $14 billion hole in the economy that needs to be filled although Prime Minister Antonis Samaras, who has pushed through unpopular austerity measures on the demand of the Troika, ruled out more pay cuts, tax hikes or slashed pensions. The government, however, is going ahead with plans to transfer or fire 40,000 public workers.

Other stopgap possibilities include using leftover funds from a bank bailout program and previously discussed debt support measures, it was reported. In Frankfurt, the ECB said Executive Board member Joerg Asmussen would visit Greece on Wednesday to discuss progress on reforms needed to ensure more bailout money being released from the current package.

Greece got an aid tranche of 5.8 billion euros ($7.75 billion) from the Troika in July and stands to receive another 1 billion euros ($1.3 billion) in October on condition it meets fiscal targets. Troika envoys are due back in September to check the books again.

Merkel, who has backed aid for Greece but only on condition of unrelenting austerity, didn’t comment on what Schaeuble said but told the newspaper Ruhr Nachrichten that Greece will not be allowed another debt write-down however.

“No, I don’t expect a new haircut for Greece. We are moving ahead step for step. There is no question that a lot has to change in Greece. But we also see clear progress and recognize this,” she was quoted as saying.

“In the Eurozone, we always said that we would evaluate the Greek situation again at the end of 2014 or in early 2015. It makes sense to stick to this timeline.”

France, a crucial partner for Germany within the EU, has stressed that Greece is heading in the right direction. “It seems to me that this program is on track,” French Finance Minister Pierre Moscovici told Inter radio. “I don’t see an urgent need for a new aid plan for Greece.”

 

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  • Dean Plassaras

    For the 7 months ending July 2013, Greece recorded a primary surplus of 2.55 Bil. euros against a 3.1 Bil deficit for the same period last year and a 3.14 Bil. deficit of budgetary target.

    This means that Greece did 5.6 Bil. euros better than expected.

    I would say that alone qualifies Greece for an additional package.

    http://www.iefimerida.gr/news/118902/%CF%80%CF%81%CF%89%CF%84%CE%BF%CE%B3%CE%B5%CE%BD%CE%AD%CF%82-%CF%80%CE%BB%CE%B5%CF%8C%CE%BD%CE%B1%CF%83%CE%BC%CE%B1-255-%CE%B4%CE%B9%CF%83-%CE%B3%CE%B9%CE%B1-%CF%84%CE%BF-%CE%B5%CF%80%CF%84%CE%AC%CE%BC%CE%B7%CE%BD%CE%BF-%E2%80%93-%CE%B1%CF%8D%CE%BE%CE%B7%CF%83%CE%B7-%CF%84%CF%89%CE%BD-%CE%B5%CF%83%CF%8C%CE%B4%CF%89%CE%BD

  • Alex

    Finally he admits it. He’s wrong about not needing another haircut though. The entire reason Greece needs more funds is because we cannot afford to make interest payments on principle. Adding more debt will not reduce that problem it will only make it more difficult. A haircut will either happen volentary or Greece will be forced to take this route when we don’t have the funds to pay back loans.

    Taxes are already very high (making it even higher punishes honest taxpayers, encourages black market, and even hurts our competitiveness). Unemployment being very high also means there is no good short term expectation of seeing any dramatic increase in collectived taxes. Privatization will help but will not be enough. There can still be some trimming of government jobs but for the most part services have been cut as is fair.

    There are a few more cuts that can be made but Greece has mostly done its part. We are close to have a primary surplus (which means we are close to living within our means sans interests payments). What we need now is not more bailout money but reduced principle and reduced interest rates to pay back existing loans. Not more loans to pay off loans that will never be repaid in full.

  • Berlin

    German voters , the taxpayers will not allow people like you to lead them. You are letting ungrateful Greeks to continue to abuse us. Greeks must first learn how to love their country by paying their taxes and allow freedoms for ethnic population within its territory.

  • Alex

    What a crock of sh-t Like you are “German”: troll. Like you care about minorities. You are obviously an ultra nationalist nationalist from neighbouring sate trying to push an agenda in Greece. Aren’t you ashamed of yourself constantly lying you low life? Didn’t your mama teach you its wrong to lie?.

  • worldarts

    Mine Furher Schuable has spoken again, butting his nose in… Seig heil !!

  • worldarts

    My God…After 2 World Wars & 30 million people murdered and 1/2 million slaughtered in Greece, why would anyone think the German mentality has changed? It’s only been 60 years and they are at it again now destroying Europe in a new kind of ‘Biltzkrieg’ with “Financial Weapons of Mass Destruction”…

    They are also selling military weapons on the open world market and training other countries armies and Police like they have done in Greece, making them brutal …Why is the US & EU Allowing this to happen?

    The Germans must be reigned in again before it’s too late.

  • ibid

    Nosferatu, the crippled vampire has bared his fangs again.

  • patrioti

    Heil Hitler!

  • 68040

    Once again your confusing FYROM with Greece. Ethnic minorities in FYROM such as Bulgarians, Greeks and Albanians are heavily discriminated against. Albanians are regularly murdered by the state in FYROM. Greeks who are indigenous to the region can’t speak the academically and archeologically backed truth about Greece’s Macedonian history. Bulgarians are not allowed to recognize their Bulgarian heritage and are forced to call themselves by the Greek name of Macedonia because the population brainwashed by Tito think without proof they are Macedonian.

    German voters are happy with Southern Europe. Germany made 1.2 trillion Euros in profits from favourable manufacturing regulations off Southern Europe and several hundred million Euros off the UK. All these bailouts are for German Bankers who passed their derivatives debt to the peripheral EU states.

  • 68040

    Exactly. The only mistake Greece ever made was trusting Germany to run the Eurozone while Germany was the bankrupted state in European history. Multiple times Germany went bankrupt in the 20th century while Greece ran the Byzantine Empire for almost a thousand years without economic problems thanks to the gold standards (a Greek invention) and the Justinian codex.

  • 68040

    The good news is that Spain, Ireland and Portugal are waking up too to the banking cartel in addition to Hungary and Iceland.

    Skopians and/or Commie traitors have “bilked” the crisis so much to the point they look like mad dogs.

  • 68040

    Greece needs more bailouts means German banks need more money printed to themselves.. All European banks are insolvent but Germany who runs the ECB/EU made sure to transfer derivatives losses created privately by mostly German and some French bankers and had them transferred to the sovereign debts of the peripheral EU states.

    Hundreds of millions of Europeans are more aware of this than they were just a couple of years ago. All of this double standard in banking (as Austria, German and Dutch banks received massive bailouts quietly and directly independent of the Public) will haunt the Germans in the future for years to come.

  • Alex

    fyi – worldarts wants us to vote for communist Syriza.

  • worldarts

    What happened to the so-called Gov’t’s big push to get repartations from Germany after they let Hitler take our money and looted all our gold in WW-2?
    What Samaras and fat-boy Venizelos gave in to Merkel again already?!

  • worldarts

    The LOANS are just a clever way for EU Bankers to keep Greece deep in continual DEBT! — Reject them!

  • worldarts

    REALLY WANT TO KNOW WHAT IS GOING ON TODAY IN GREECE & WORLD? CHECK THIS AMAZING DOCUMENTARY OUT! — INCREDIBLE !!!

    http://www.youtube.com/watch?v=lEV5AFFcZ-s

  • Dean Plassaras

    Japan has 250% debt to GDP. The debt itself is not the issue. it’s what interest you pay for it. If your interest is close to zero then over time and due to inflation your debt becomes worthless.
    Greece over the last 4 years has converted all of its debt (or almost all) form high interest paying debt to low interest paying debt.
    If you ply your cards right you can get to the point of no debt by putting all of you debt into a special category earning close to 0% and having 50 years to repay it (which means that in the end you will right it off).

  • Dean Plassaras

    The last thing you want to do is to exchange debt (which is already deemed written off) with good cash from war reparations. Let them give you debt relief first with next to zero interest rates and 50 years payback period and then ask for war reparations to replenish your treasury.

  • Alex

    We should also institute communism like worldarts wants.

  • Alex

    Like you are a “Greek”. What kind of “Greek” would support treasonous communist Syriza and support violence against other Greeks? Every cause you support the Skopians support.