Tags: EU | Greece | Financial | Crisis

Germany Ready to Back More Aid for Greece

Thursday, 12 May 2011 07:14 AM

Germany would back further support for Greece if the country continues to have problems refinancing its debt on the market, Finance Minister Wolfgang Schaeuble said Thursday.

The next progress report on Greece's current 110 billion euro ($158 billion) bailout package, due in June, "will be closely watched" and will be key in deciding how to proceed, he told parliament.

Schaeuble insisted that any further aid must be tied to tough terms, arguing it is up to the Greeks to solve their underlying budgetary and structural problems. "We won't approve additional measures without clear conditions."

Germany is Europe's biggest economy and is a central, though sometimes reluctant, player in resolving the debt crisis.

EU officials have indicated more help will be needed to keep Greece from reneging on its debt accords beyond 2013, when the current bailout program expires.

The International Monetary Fund, the European Central Bank and the European Commission are currently evaluating Greece's progress to decide on whether to release the next round of funds under last year's bailout package that saved the country from bankruptcy. Their report is due next month.

"If it appears that Greece cannot return on the financial markets within the timeframe assumed last year, then we have to talk about what additional measures especially Greece can take, what can be done in addition to solve the problem," Schaueble said.

Greece's crisis follows years of inept governance, widespread corruption and waste that created bloated budget deficits and a public debt amounting to about 150 percent of economic output.

Despite drastic spending cuts already implemented — with reductions to pensions and salaries accompanied by an increase in taxes and retirement ages — investors still don't trust Greece to repay all its debts. As a result, its borrowing rates are prohibitively high, freezing it out of bond markets.

If that situation continues, Greece would need more help — it is supposed to raise some 27 billion euros ($39 billion) on capital markets next year, but that seems very unlikely.

Officials have been tightlipped about how much money Greece may need in addition to its first bailout, but hinted that the eurozone's 17 finance ministers are likely to make a broad announcement on potential new measures after their meeting in Brussels on Monday.

Official data, meanwhile, showed Greece's economic situation was worsening.

Unemployment rose to 15.9 percent in February, from 15.1 percent in January, according to the national statistical authority. In February 2010, unemployment was at 12.1 percent.

The total number of unemployed was 787,229, while those with work numbered 4.17 million.


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Germany would back further support for Greece if the country continues to have problems refinancing its debt on the market, Finance Minister Wolfgang Schaeuble said Thursday.The next progress report on Greece's current 110 billion euro ($158 billion) bailout package, due in...
EU,Greece,Financial,Crisis
421
2011-14-12
Thursday, 12 May 2011 07:14 AM
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