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Schaeuble Crushes Debt Relief Hopes that Obama May Have Sowed

Photo by Jolanda Flubacher
U.S. President Barack Obama’s visit to Greece raised fresh hopes for debt relief that German Finance Minister Wolfgang Schaeuble rushed to quash. He said late on Tuesday that granting Greece its debt relief would not be helping the country, describing such a move as a “disservice.” A German Finance Ministry spokesman confirmed that Schaeuble had indeed made this statement, but that it was not in direct response to Obama’s visit to Greece.
“Whoever says ‘we will relieve your debts’ is doing Greece a disservice,” said Schaeuble, according to the report by the daily newspaper, Passauer Neue Presse. His comments are not surprising bearing in mind that Germany has long supported the notion that no immediate need for debt relief is needed for Greece as this would discourage structural reforms.
“We have noted that President Obama has pointed to the importance of debt relief. The euro group agreed in May on a timetable on exactly that subject, regarding measures for the short term, and later in 2018 for mid-term measures,” said German government spokesman Steffen Seibert at a news conference. He added that Obama’s visit had not changed Germany’s position on the matter, during a government news conference.
Seibert added that Obama’s view that austerity on its own does not create growth is a viewpoint that reflects that of the German government, adding that two things needed for long-term growth are a sustainable budget and the need for structural reforms.

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