And another bailout for Greece?
Anna Sonny, 23 August 2013
Germany’s finance minister Wolfgang Schäuble waded into dangerous waters by admitting that Greece may need another bailout at some point next year. Schäuble’s comments came at an election rally in Hamburg earlier this week; German elections are due to be held at the end of next month and the subject of a possible Greek bailout had not yet been breached during the campaign.
The opposition pounced on the prediction, attempting to capitalise on public resentment that Germany, often described as the powerhouse of Europe, could once again have to bear the brunt of bailouts for other countries.
Greece has received two bailout packages worth 240bn euros since 2010. In July this year the International Monetary Fund said Greece would need to plug a gap of around 11bn euros to cover the period 2014-15.
Merkel, who has so far been silent on how to close the shortfall, tried to calm the debate by saying that the matter would need to be discussed next year, when Greece’s progress with its reform programme is due to be reassessed.
Merkel’s chief spokesman, Steffen Seibert, said there was ‘nothing new’ in Schäuble’s announcement and that the issue had already been discussed by Eurozone finance ministers.
The German opposition’s reactions to Schäuble’s comments certainly look like an attempt to discredit Merkel before the elections. The latest polls show that the centre-left SPD are lagging at least 15 per cent behind Merkel’s centre-right Christian Democratic Union and its Bavarian sister party the Christian Social Union. It seems they need an issue to hone in on after the recent good news that the German and French economies have lifted the Eurozone out of recession by performing better than was expected.
There has even been good news for Greece’s economy; tourism in June this year was up 21% compared to last year, with holidaymakers choosing Greece and avoiding instability in Turkey and Egypt.
It has been suggested that there are options available for Greece, such as extending the repayment schedule on existing loans, but for now it looks as though nobody can rule out another bailout.