The institutions in charge of Greece’s bailout have reached a “common position” on how to proceed, German finance minister Wolfgang Schaeuble has announced.
Wolfgang Schaeuble’s comments appear to indicate that deadlock between the EU and the IMF over the next steps may have been resolved.
The IMF has said Greece needs more leeway to pay its huge debts before further rescue funds can be released.
However, the eurozone has been reluctant to go much further.
Arriving for a meeting of eurozone finance ministers in Brussels, Wolfgang Schaeuble said: “I believe the institutions have a common position and that we will get to a point today where the technical mission can go to Athens so we can get a result.”
In its most recent assessment of the Greek economy, the IMF said: “Greece cannot grow out of its debt problem. Greece requires substantial debt relief from its European partners to restore debt sustainability.”
Eurozone governments have provided some debt relief already, in the form of lower interest rates and extended repayment periods. IMF staff thinks Greece needs more concessions.
However, the IMF has said there was no need for what it calls an “upfront haircut” – a reduction in the principal that has ultimately to be repaid.
In another development, Klaus Regling, the CEO of the European Stability Mechanism – the eurozone’s bailout fund – said in a newspaper interview that Greece’s finances were improving faster than expected.
He told Germany’s Bild that Greece would probably need far less than the agreed maximum loan of 86 billion euros by August 2018 as a result.
Athens has made a 2 billion euro repayment to the bailout fund as expected, which Klaus Regling said showed “Greece is a reliable contract partner. It is a sign that the restructuring of the Greek banking sector is progressing well”.
German Chancellor Angela Merkel has warned that her country’s economic climate in 2013 will be “even more difficult”.
In her New Year message, Angela Merkel also cautioned that the eurozone debt crisis was far from over.
However, she did say that reforms designed to address the roots of the problem were beginning to bear fruit.
Angela Merkel’s comments appeared to contradict German Finance Minister Wolfgang Schaeuble who said last week that the worst of the crisis was over.
In a taped interview to be broadcast later on Monday, Angela Merkel urged Germans to be more patient.
“I know that many people are naturally concerned going into the new year,” she said.
“The economic environment will not in fact be easier but rather more difficult next year. But we shouldn’t let that get us down; rather it should spur us on.”
German Chancellor Angela Merkel has warned that her country’s economic climate in 2013 will be even more difficult
She linked future German prosperity to a prosperous European Union.
“For our prosperity and our solidarity, we need to strike the right balance,” Angela Merkel said.
“The European sovereign debt crisis shows how important this balance is.
“The reforms that we’ve introduced are beginning to have an impact. Nevertheless we need to have further continued patience. The crisis is far from over.”
In an interview with the German newspaper Bild last week, Wolfgang Schaeuble cited positive developments in Greece and France, saying: “I think the worst is behind us.”
Germany – Europe’s largest economy – has been the paymaster in the eurozone crisis, a move unpopular with many German voters and some conservative MPs in Angela Merkel’s coalition.
Analysts say most Germans remain wary of eurozone bailouts but generally approve of Angela Merkel’s handling of the crisis.
In October, the German government slashed its forecast for economic output in 2013 to 1.0%, compared to 1.6% previously anticipated.
The country’s central bank has said Germany may even come close to recession early in the new year.
Nevertheless, Angela Merkel underlined that Germany in 2012 had the lowest unemployment since reunification in 1990.
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