Schäuble: ‘There Will Be No Further Haircuts’

Dr. Wolfgang SchäubleGerman Finance Minister, Wolfgang Schäuble seemed rather positive about “providing limited aid” to Greece, stating that this will not include a new “haircut” to the already existing debt.

“What we always said was that if Greece were to need further, limited, financial assistance at the end of this year when the current aid package expires, then we are prepared to do this, provided that Greece has met its obligations by then. Greece is on the right path,” said Schäuble during an interview.

However, he stressed the fact that this new aid package would not include a new “haircut” of the debt. “In the same way that we had a haircut of 53.5 percent for private investors holding Greek government debt, there will be no such haircut, we said then it was a one-off and it will not be repeated.”

Furthermore, Schaeuble expressed his opinion that there should not be any anxiety over whether the euro will remain stable, and estimated that there is no more risk of the financial crisis spreading to Europe.

Finally, the German minister warned that the central banks of emerging economies must proceed with caution. “We have used monetary policy as a tool to gain some time. But this time it should not be used to avoid solving problems,” he concluded.


  1. Schaeuble can hedge his statements about another bail out for Greece and deny a haircut is in the offing. The question is will he succumb to pressure from Merkel, the others or will he step down as Finance Minister at a politically convenient opportunity.

  2. Pressure from Merkel is not pro-haircut but against discussion of additional aid – knowing full well that everybody tends to listen very selectively to what they wand to hear.
    Schäuble translates her stance to the mantra “no additional aid without completing the agreed-upon structural reforms”.
    The situation is heading for a show down between Tsipras and Schäuble.
    It is more likely that Merkel drops Hollande than Schäuble.
    Tsipras should rather take a slice from Renzi.

  3. You may be right. Merkel has had this do or die discussion with Samaras already and little has been done. The behind the scene verbal polemics phase has concluded and now it is time to turn the screws of the rack a little tighter. The problem with the reforms is nothing prevents the next administration from reversing them. Schaeuble would be wise to accept a EU, World Bank, appointment than to be encumbered and eventually blamed for the looming financial debacle. It could only be worse if we were the Ukraine.

  4. Syriza might reverse the reforms,but who will pay for it?Where do you think Tsirpras will get the money from?The answer is:from nowhere.With no money to pay for an reversed communistic state, the re-adoption of the Greek national currency Drachma is the only option Greece would have under Syriza.

  5. If there is nothing to sustain reforms we should expect the bad habits of the past to return. At best reforms implemented to date have been modest to what is needed. When the source of funding are removed then the safeguards likewise will be removed. Whether it be Euros, Geuros, Eurachmas or Drachmas, SYRIZA will find a way to enrich itself.

  6. First of all,of all the reforms Greece promised under the terms and conditions of its bailouts,Greece had adopted less than 30%.The privatization targets success rate is totally dismal because the privatizations had been stalled by Unions and special interests.So is the lagging public sector downsizing.Samarases government totally failed to implement reforms and also exhausted the bailout funds.I would not call that “sustained reforms” exactly.

  7. I’d say there is ample blame to go around. At the first instance when the mutually agree terms of the memorandum were breached, all further discussions for bailout funding should have been suspended.

  8. I do agree with you.The Troika had been very generous and tolerant in spite of Greece’s resistance to comply,they gave Greece the funds anyway.They rewarded Greece’s bad practices,corruption and failure to implement reforms and by by doing so,they even encouraged it!