Greece must make sure it fulfils the conditions needed to be a member of the euro zone, German Finance Minister Wolfgang Schauble said today, making him one of the most senior members of the government to question Greece's membership of the currency bloc.
His comments came as new figures showed a bigger than expected contraction of Greece's economy in the second quarter.
Mr Schauble added that Germany stands ready to help Greece, but if the country did not meet the requirements set by the European Union, European Central Bank and International Monetary Fund, further aid payments could not be granted.
''I understand that there is resistance among the Greek population to austerity measures. But in the end it is up to Greece as to whether it can fulfil the conditions that are necessary for a membership of the common currency," Schauble said on Deutschlandfunk radio. "We can give no discounts," he added.
Backsliding in Athens has put a new aid payment from the country's international lenders in danger. This has angered some German lawmakers, including several from Chancellor Angela Merkel's conservatives, who have started calling for Greece's ejection from the 17-nation currency area.
Euro zone sources yesterday said that Greece will have to compensate for slippage on its budget deficit target this year in the 2012 budget and in other areas of reform agreed with international lenders to get the next aid tranche.
Schauble also urged Italy to work on consolidating its budget deficit. "Italy knows it must correct its budget deficit, its high indebtedness and it has now, thank goodness, after some backtracking, decided to make massive cuts to reduce the deficit. Let us hope that it stays on this course."
He also pledged to continue efforts in Germany to reduce the German deficit.
Outlook for Greek economy even worse
The Greek economy shrank 7.3% in the second quarter on a 12-month comparison, the statistics institute said today, signalling a greater fall than expected. The institute had estimated the contraction at 6.9%.
The body also revised the shrinkage in the first quarter up to 8.1%, and the government said the economy was now set to shrink 5% this year instead of the previously estimated 3.5%.
