German Chancellor Merkel and FinMin Schaeuble: Greece Needs to Make Specific Reform Proposals



Bundestag

“I wish Greece good luck as a member of the Eurozone,” German Chancellor Angela Merkel said yesterday, while -almost at the same time- Finance Minister Wolfgang Schaeuble stated that the “trust with Greece has been lost.” Addressing a European Investments Bank council in Berlin, the German Chancellor highlighted that “Greece should now specify its reform proposals and discuss them with the three institutions: The European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF), as this was the Eurogroup’s outcome.”

The bailout extension approved last week by the German Parliament should help the Greek reform program to succeed, Merkel noted, adding that there was a need for stronger economic policy coordination among Eurozone member-states.

At the same time, Schaeuble, through his representative Martin Jaeger, warned that Greek Finance Minister Yanis Varoufakis should consider if he is ready to accept a default for his country, insisting in his position that any delay in the ECB payment by Greece would constitute a credit event. As Jaeger clarified, the German Finance Minister is not threatening but rather states the obvious. As he further said, Berlin has lost count with what Varoufakis’ has stated in several interviews, pointing out that there is no alternative to be strict with Athens, as any trust has been lost in recent weeks.

In addition, Jaeger highlighted that Greek Prime Minister Alexis Tsipras’ allegations that Spain and Portugal have formed a front against Athens in order to serve their domestic political goals is a “very unusual mistake.”