‘Excessive Leniency to Greece Will Cost Europe €100 Bln’ Says German Paper

If creditor countries such as Germany show excessive leniency towards fiscal targets in Greece, it will cost them dearly, says a Frankfurter Allgemeine Zeitung report.

According to the German newspaper, Greece has agreed to reach primary surpluses of 3.5% of GDP in the coming years. If the primary surplus is 1.5%, as requested by the International Monetary Fund, then Athens would be needed in the medium term additional funding of about 100 billion euros in the medium term, according to estimates by the German Finance Ministry.

This minimum amount was reported last week in the Budget Committee of the German Parliament by Deputy Finance Minister Jens Spahn. In this case, lenders will have to bear this additional burden. And this would mean a new aid package,” the German official argued.

The report says that German MPs are reluctant to have the problems of Greece on the shoulders of European partners. They refuse to offer a nominal debt haircut or additional financial assistance, concluding that the Greek government should implement the agreed reforms without discounts.