Calamos Supports Greece
GreekReporter.comGreek NewsEconomyGermany Repeats: No Greek Haircut

Germany Repeats: No Greek Haircut

schaeublemerkel.jpgHammering home a message repeated many times already, German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble said Greece will not be allowed to stiff international lenders with big losses the way it did to private investors, although critics said they’re lying and that it will happen if she wins re-election next month.
A previous Greek government imposed 74 percent losses on banks and investors, including those in the Diaspora, many of whom were nearly wiped out after putting their money and faith into their homeland. But Merkel told German daily Frankfurter Allgemeine Zeitung, “I see no haircut for Greece,” the term used when investors are forced to take losses on their holdings.  “I am amazed again and again by the carelessness with which this is being talked about,” she said.
“Such a move could spark uncertainty in other parts of Europe,” Merkel warned.
Meanwhile, in an interview with Badische Neueste Nachrichten, Schaeuble also ruled out the prospect of an additional Greek haircut, acknowledging that the recession-hit country had beaten most economic predictions although it’s also been said to be far off meeting some fiscal targets and could have a $14 billion hole to fill.
German opposition parties have piled pressure on Merkel ahead of a national election on Sept. 22, after the country’s central bank last week claimed that Greece would probably need more bailout funding by 2014. Greek Prime Minister Antonis Samaras’ coalition government has been floating the idea of a haircut to further write down the country’s still-staggering $390 billion debt.
Schaeuble came to Greece in June and said then that  there was “no convenient shortcut” for the country’s debt problems despite an alarming increase in poverty and unemployment during the crisis.
Schaeuble, on his first visit to Greece since its financial crisis broke out in 2009, said the country had taken “big steps” to try and balance its budget. But he added that the debt-strapped country had little choice other than to press ahead with painful reforms.
“There is no way around structural and fiscal reforms that are currently being carried out. The only way to achieve sustainable growth is to make the economy competitive and reduce public deficits,” Schaeuble said then.
“There is no convenient shortcut. We Germans know this. Ten years ago we were the sick man of Europe. We had to take a long and painful path to become the very center of growth and anchor of stability in Europe.”
Schaeuble discouraged talk of Greece receiving a second write-off — or ‘haircut’ — on its public debt following the massive debt restructuring deal agreed with private sector bondholders last year. Most of Greece’s debt is now owed to other Eurozone governments in the form of bailout loans.
“I would like to ask all of you not to continue with this discussion about a new haircut, as it’s not in your interest,” he said. He argued that writing off some of the bailout loans Greece owes would undermine confidence in Europe’s rescue programs by proving they are not reliable.”You will destroy any confidence … If you take guarantees and then you are discussing a haircut — then you are a liar. And I’m not a liar.”

See all the latest news from Greece and the world at Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!

Related Posts