Greece hopes for imminent deal with creditors despite Germany’s demand to leave the EU
The Greek government has expressed hope of an imminent deal with its EU creditors, despite a warning from the German finance minister, Wolfgang Schäuble, that the country could cut its debts only by leaving the single currency.
Athens is in a familiar stand-off with the German finance ministry as it seeks easier repayment terms on its €330bn (£280bn) debt pile, which the International Monetary Fund has described as unsustainable and explosive.
The IMF has so far declined to get involved in the latest Greek rescue effort, a three-year EU bailout worth €86bn set to run until August 2018. The fund says it will only join if Greece gets significant debt relief, although its board is split. Germany and the Netherlands, which both face elections this year, think the IMF’s involvement is crucial for the bailout plan to continue.
Tensions – and Greek borrowing costs – have risen in recent weeks, ahead of a meeting of eurozone finance ministers on 20 February, which is widely seen as the last moment to reach agreement before the eurozone election cycle. The Dutch go to the polls in March; French presidential elections follow in April-May and German elections in the autumn.
George Katrougalos, Greece’s Europe minister, voiced confidence that a deal was within reach: “I am optimistic that we can have such an agreement before the Eurogroup of 20 February.”
He told journalists in Brussels that Europe was not the problem. “If we had just to deal with the Europeans we would have already completed this review in December. All the delay is due to the ambivalence of the IMF to participate or not to participate.”
Katrougalos brushed aside comments from Schäuble, who has previously called for Greece to quit the eurozone. “Mr Schäuble is now an isolated voice in Europe, one of the last defenders of austerity,” he said, arguing that the German minister was not supported even in his own country.
