Schaeuble tells Greece to stop seeking debt forgiveness

Thursday 18 July 2013 17.48
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Wolfgang Schaeuble (left) said Greece should not 'continue this discussion' on debt
Wolfgang Schaeuble (left) said Greece should not 'continue this discussion' on debt
The Greek government has approved a scheme to lay off 25,000 public workers
The Greek government has approved a scheme to lay off 25,000 public workers

Germany's finance minister told Greeks to stop lobbying for more debt forgiveness during a visit to Athens today.

His trip forced authorities to shut the city centre and ban protests against the deeply unpopular champion of austerity.

Germany has been forced to provide billions in aid to keep Greece and other struggling euro member countries afloat.

His visit came hours after Greece's parliament narrowly passed a scheme to fire thousands of public sector workers to secure an additional €7bn in aid, ignoring mass protests by teachers and policemen outside.

After praising Greece for trying to get its finances back on track, Mr Schaeuble bluntly told Greeks to stop asking for a second debt writedown after a restructuring last year that imposed massive losses on private holders of Greek bonds.

"My advice is not to continue this discussion," he told businessmen at an event in central Athens.

"We have to stick to what we've achieved. Anything else is not in the best interest of Greece. Another haircut beyond the 53% for the private sector is not doable."

Official lenders such as the eurozone and the International Monetary Fund now hold more than 90% of Greece's debt.

That means the burden of any further debt relief - which Greece hopes will follow once it hits its financial targets this year - will fall on eurozone states fed up with Greece's seemingly never-ending funding needs and poor record on reforms.

In recent weeks Germany has repeatedly ruled out a writedown of Greek debt, although critics believe the government is simply trying to hold off discussion on it until after Chancellor Angela Merkel runs for re-election in September.

The "troika" of the International Monetary Fund, European Central Bank and European Commission is propping Greece up with over €240bn in aid.

However, it is fiercely disliked in Greece for its insistence on austerity.

Earlier this week, the EU justice commissioner called for the troika to be dissolved, though other senior eurozone officials have defended it.

Mr Schaeuble is expected to sign a deal later tonight offering Greece €100m for a fund to help pull the country out of a recession that is now in its sixth year.

A ban on demonstrations during his visit prevents protesters from gathering in central parts of Athens, including around parliament in Syntagma Square, the focus of often violent protests against cutbacks designed to tackle the debt crisis.

The ban includes groups of more than three people holding banners and shouting slogans.

Central metro stations will also be shut.

"Who is Mr Schaeuble for you to prohibit Greek citizens from protesting against austerity?" asked Panagiotis Lafazanis, a politician from the radical leftist Syriza opposition party, which wants to abandon the bailout plan.

"You are governing the country like a protectorate, a banana republic."

Syriza, which branded the ban a "coup-like" move, called on Greeks to rally in a central Athens square against a visit by the "architect of austerity policies in our country".

Tens of thousands of demonstrators defied a ban on protests during Ms Merkel's visit to the Greek capital in October, while some pelted police with rocks, bottles and sticks.

Pictures lampooning Ms Merkel as a latter-day Nazi, festooned with swastikas, are commonplace in Greece.

3,500 police are being deployed in the streets of Athens during Mr Schaeuble's visit, while another 3,000 will be on standby.

Keywords: greece, eu/imf