Greek referendum on bailout program could make sense: EU paymaster Germany
EU paymaster Germany said on Monday it could make sense for Greece to hold a referendum on painful economic reforms under negotiation with its creditors, changing tack as Berlin’s own lawmakers bridle at further aid for Athens.
Euro zone governments have previously opposed such a vote, saying there is no time and it could destabilize financial markets and trigger a run on struggling Greek banks.
When former Prime Minister George Papandreou surprised EU partners by proposing a referendum in 2011 at the height of the euro zone debt crisis, he was summoned to emergency talks with leaders of France and Germany and told bluntly to drop the idea.
But with Greece fast running out of cash and desperate for a deal to avert a default and possible exit from the euro zone, German Finance Minister Wolfgang Schaeuble said securing public backing for the necessary sacrifices might be useful.
A referendum could make it easier for leftist Greek Prime Minister Alexis Tsipras to climb down from election promises that are making a cash-for-reform deal hard to achieve.
“If the Greek government thinks it must hold a referendum, then let it hold a referendum,” Schaeuble said on arrival at a meeting of euro zone finance ministers.
“That might even be a helpful measure for the Greek people to decide whether it is ready to accept what is necessary, or whether it wants something different.”
There was no immediate reaction from Greece, but finance ministry officials said Athens had made a crucial payment of 750 million euros to the International Monetary Fund a day before it falls due on Tuesday, easing market fears of a default.
The ministers spent less than an hour hearing a progress report on the slow-moving negotiations with representatives of the IMF, European Commission and European Central Bank.
EU officials said the ministers would issue a short statement acknowledging progress in the talks but saying more time and effort are needed to bridge the remaining gaps.
Sources familiar with ECB thinking said there was still too little progress on core issues and too much uncertainty for the bank to allow the Greek government to sell more short-term Treasury bills to ease its funding crunch.
