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Schaeuble Was Ired By Haircut Talk

schaeuble_390_1305German Finance Minister Wolfgang Schaeuble, who sparked a fury of debate last week when he said Greece would need a third bailout package said he was motivated by irritation over constant talk Greece would have to impose losses on its international lenders to give them a so-called “haircut.”
“The debate that there will be a new debt cut was dangerous” as it could have reignited the Eurozone’s debt crisis and undercut promises from Germany – the biggest contributor to $325 billion in two bailouts – that Greece wouldn’t be allowed to make taxpayers in the other 16 countries that use the currency pick up the tab for generations of wild overspending.
“You could have a problem somewhere in Malta, and interest rates would rise in Spain, and the economy goes down. That’s something I wanted to avoid at all cost,” Schaeuble said.
But he said answers had to be given to questions on whether Greece would need more money as it was being talked about during the German elections as Chancellor Angela Merkel is campaigning for re-election on the Sept. 22 ballot. Her critics said she was trying to hide that Greece would need another rescue.
“I had to make clear that there won’t be a debt cut, but that that doesn’t mean that nothing has to be done next year,” Schaeuble said. “I wanted to avoid that anybody could say that this government isn’t saying what it knows before the election.”
Greek Finance Minister Yannis Stournaras told Athens-based newspaper Proto Thema the country may need 10 billion euros ($13 billion) in aid. While another debt cut isn’t under discussion, Greece will get more time to repay loans and lower interest rates if it achieves a primary surplus, he said.
While declining to mention any figures, Schaeuble said the size of the next aid program will be “much lower” than previous ones and not all of Greece’s additional requirements can come from the European Union’s so-called structural funds.

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