German minister skeptical on more time for Greece

BERLIN — Giving Greece more time to carry out reforms and spending cuts won’t resolve the debt-laden country’s problems, Germany’s finance minister said Thursday, a day before the Greek prime minister meets Chancellor Angela Merkel.

Greek Prime Minister Antonis Samaras is seeking to earn his nation more time to complete reforms and hold on to bailout loans — without which Greece would be forced into a chaotic default on its debts and could be forced out of the 17-country eurozone.

Athens has faltered in the speed and effectiveness with which it has implemented the reforms, fuelling impatience among its creditors, notably Germany, which is the single largest contributor to its (euro) 240 billion ($300 billion) bailout packages. A pair of indecisive elections this year, which ultimately brought a coalition government under Samaras to power, didn’t help.

Greece’s continued access to those packages hinges on a favorable report next month from the so-called “troika” of the country’s debt inspectors — the European Union, European Central Bank and the International Monetary Fund. If Greece is found to have failed on key economic reforms that are conditions of the bailout loan, vital funds could be halted.

German Finance Minister Wolfgang Schaeuble kept up the pressure Thursday. He noted that it’s only a few months since creditors drew up a second bailout package and agreed on a massive debt writedown for Greece.

“You cannot just say after half a year, all of that is not enough, because then you will never win the confidence of financial markets,” Schaeuble said on Germany’s SWR radio. “So more time is not a solution for the problems. The question is how we win back confidence.”

Schaeuble insisted that he wouldn’t speculate on what happens next before the troika delivers its report, but made clear his skepticism over Samaras’ argument that giving Greece more time doesn’t have to mean giving it more money.

The existing program for Greece “must be implemented, and in case of doubt more time means more money,” he said. “And more money would require a new program.”

Leading lawmakers in Merkel’s center-right coalition have made clear that they oppose drawing up a third rescue program for Greece.

“With the program last year for Greece we went to the limits of what is economically justifiable,” Schaeuble said. “It is not about more or less generosity — it is simply about finding a common way to lead this eurozone as a whole out of this growing lack of confidence on the financial markets.”

Samaras met in Athens on Wednesday with Jean-Claude Juncker, who chairs meetings of eurozone finance ministers and is also Luxembourg’s prime minister. He meets Merkel in Berlin on Friday, and heads to France on Saturday for talks with President Francois Hollande.

Ahead of that, Hollande is coming to Berlin on Thursday to meet with Merkel himself as the eurozone’s two biggest economic powers try to determine what should be done.

Some German politicians — though not Merkel or Schaeuble — have talked openly in recent weeks about the possibility of Greece leaving the euro, and the vice-chancellor, Economy Minister Philipp Roesler, has said that the idea of a Greek exit has “lost its horror.” Germany is the largest single contributor to Greece’s bailout packages.

Samaras told Germany’s Bild newspaper in an interview printed Thursday, however, that “all of these statements don’t help at all.”

“Germany needs a strong eurozone,” Samaras was quoted as saying. “And if a country is forced out of the euro, it would probably not be the last, at least that’s what the financial markets would see, and to fight against that would be difficult.”

Samaras said that, given the opportunity, he was confident Greece would rebound.

“Greece has enormous economic potential that we need to use,” he said. “We will make a spectacular comeback.”

Merkel herself has said little about Europe’s options. She cautioned on Wednesday that she and Samaras “will not find solutions” during this week’s meeting and noted that Europe is waiting for a report next month from Greece’s international debt inspectors.

“Then the decisions will be made,” she said during a visit to Moldova.