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Schaeuble: Greece May Need More Help Past 2014

Greece_SchaeubleDisputing Greek Prime Minister Antonis Samaras’ assertion the country is on the road to recovery from a crushing economic crisis, the country will need a third bailout of under 10 billion euros ($13.6 billion), German Finance Minister Wolfgang Schaeuble said.
Samaras and Finance Minister Yannis Stournaras, ahead of critical May elections for Greek municipalities and the European Parliament, had steadfastly and repeatedly denied Greece would need more aid beyond the 240 billion euros ($327 billion) put up by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) in two bailouts, most of which run out this year.
But Schaeuble, whose country has put up much of the money and demanded harsh austerity measures in return, told the German news magazine Focus that Greece still needs help.
He didn’t say if more tough conditions would be insisted upon in return, with Samaras, whose New Democracy Conservatives took a beating in the EU ballot, having said he would never ever again implement more austerity, although he already has, with more pension cuts coming.
According to the interview, Schaeuble said that the second bailout, given in 2012, wasn’t big enough. The Troika estimates it will take until 2022 before the country’s debt is sustainable, which he said means a third rescue package.
He said Germany would also not relent in its insistence on pay cuts, tax hikes, slashed pensions and worker firings so that German banks, which are profiting from Greece’s crisis, would get paid back, along with others who put up risky money.
The foreign financial institutions are first in line to get paid from tax revenues, requiring the government to make big cuts in areas such as education and health care because money is earmarked for debt repayment.
Samaras has said that with data showing Greece has a 1.5 billion euro surplus – it wasn’t explained how a country could have a surplus but need a bailout at the same time – that it would trigger a clause allowing the government to seek debt relief from the Troika in some form.
Germany has ruled out a so-called “haircut” in which Greece would stiff the Troika and its contributors for a big chunk of change, forcing taxpayers in the other 17 countries of the Eurozone to pay the bill for generations of wild overspending and runway patronage by Samaras’ party and his coalition partner, the PASOK Socialists.
Stournaras had said that the country is fully funded until the summer of 2015, disagreeing with Schaeuble’s assessment of Greece’s predicament.
“For the 2015-16 period the country’s financing needs will depend to a great degree on the results of the bank stress tests that will be carried out by the European Central Bank on a pan-European level,” Stournaras said, couching whether Greece needs more money.
The German Finance Ministry attempted on Monday to play down comments by Finance Minister Wolfgang Schaeuble that Greece would require a third bailout.
Finance Ministry spokeswoman Marianne Kothe insisted that Schaeuble had said “nothing new” and that it would be up to Greece whether it would need further loans from its eurozone partners.
In any case, he likely won’t be around as media reports said a coming Cabinet reshuffle would see Samaras showing Stournaras the door, although the former think tank technocrat was the country’s point man in tough negotiations with the Troika.
His cold demeanor and lack of public sympathy for people affected by the crisis were said to have worked against him, especially with New Democracy losing to the major opposition Coalition of the Radical Left (SYRIZA) in the EU ballot, pushing Samaras to try to find a way to present Greeks with a kinder, gentler face of his government.

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