Germans downbeat on chances of Greek deal next week

Wed Apr 15, 2015 2:05pm EDT
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By Gernot Heller and Deepa Babington

NEW YORK/ATHENS (Reuters) - Germany's finance minister said on Wednesday there was no prospect of the euro zone reaching a deal with Athens next week on economic reforms that would unlock bailout funds, potentially leaving Greece perilously short of money.

Both the Greek government and its creditors have said they need to reach at least an outline agreement at an April 24 meeting of euro zone finance ministers in Latvia's capital Riga.

But Athens, which has signaled it may not have enough cash to keep up payments to international creditors in May, has yet to produce a program of reforms that is deemed acceptable.

German Finance Minister Wolfgang Schaeuble told the Council on Foreign Relations in New York that no one expected a deal at the Riga meeting or in the coming weeks.

"No one has a clue how we can reach agreement on an ambitious program," he said, adding that Greece's new leftist-led government had "destroyed" all the economic improvements achieved by Athens since 2011.

The veteran conservative minister appeared to suggest that the euro zone could cope with a Greek default, saying markets had "priced in" all possible outcomes to Greece's debt woes and there was no contagion to other euro zone sovereign borrowers.

Standard & Poor's decision to downgrade Greece's credit rating to CCC+ with a negative outlook, citing the prolonged negotiations, suggested it sees default as increasingly likely.

In Brussels, European Commission President Jean-Claude Juncker, who has tried to mediate with Greek Prime Minister Alexis Tsipras, told a closed-door meeting of the EU executive that his patience with Athens was wearing very thin and there had been no progress in recent days, an EU official said.   Continued...

Workers remove scaffolding from the Athens Academy building next to a statue of Goddess Athena (L) March 23, 2015.  REUTERS/Alkis Konstantinidis