German Finance Minister Wolfgang Schauble has reportedly reiterated his opposition to immediate Greek debt relief through the use of long-term interest rate guarantees, the German news weekly Der Spiegel reported on Friday.
The influential German media outlet quoted an unnamed source for the report.
According to the report, the powerful German minister is against a proposal by the ESM to “cap interest rates on Greek debt at 2 percent until 2020, regardless of how debt develops with credit market trends,” a Reuters dispatch quoting Der Spiegel reads.
Nevertheless, he is reportedly open to an extension of repayment periods, lower interest rates and even a longer grace period, “but only after 2018”. That year marks the end of the third bailout duration and regular reviews.
On his part, Clemens Fuest, the head the Munich-based Ifo Institute for Economic Research, said Greece’s primary problem is not the debt but a lack of a growth plan and support for reforms.
Fuest, who is also a member of a so-called council of “wise men” who advise the German government on economic policy, was quoted by “Rheinische Post” as claiming that the Greek government has also not met commitment it undertook last summer.
“… at the same time there is negotiation over the disbursement of the next loan tranches, even for debt relief. The issue is not the loan program for Greece, but the transfers. The Greek government knows that creditors will back down, again and again, regardless if Greece’s meets its commitments or not.”
Finally, the German news agency MNI claims that Greece and its institutional creditors have agreed over 18 prior actions ahead of a first review of the Greek program (third bailout), citing an unnamed EU official.
In echoing a similar report by “N” this week, MNI said the IMF continues to object to Athens’ counter-proposal for a contingency package demanded by the Fund.
The news agency said 17 of the prior actions deal with commitments over fiscal reforms and an additional commitment over the still undetermined scope and substance of the contingency mechanism. The leftist Greek government has promised to legislate an automatic spending cut mechanism in case fiscal targets through 2018 appear in jeopardy.
The report adds that the measures will have to be submitted and ratified by Greece’s Parliament ahead of yet another crucial Eurogroup meeting, on May 24, when Eurozone finance ministers are expected to confer on the delayed first review and the subsequent disbursement of more than 10 billion euros in loan installments to Greece.
