February 10, 2012 / 12:17 PM / in 6 years

Schaeuble told MPs Greek plan short of target: sources

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble told conservative lawmakers on Friday that existing Greek reform pledges would not bring its debt down to levels that are considered sustainable, sources who attended the meeting said.

Schaeuble’s reported comments came a day after Greek leaders said they had clinched a deal on economic reforms needed to secure a second EU bailout and ward off bankruptcy. Euro zone finance ministers have demanded more steps and a seal of approval from the Greek parliament before releasing the funds.

“Schaeuble said the current plans would leave Greece short of the goal of cutting debt to 120 percent of GDP by 2020,” one conservative source said.

Berlin also remains skeptical that Greek political leaders, their eyes focused on a possible election in April, can deliver on their promises, given the anger of voters after five years of wrenching recession.

Two sources who attended the meeting said Schaeuble had told parliamentarians that Greece would only achieve a debt-to-GDP ratio of 128 percent in 2020 under its current plans.

Another source said the minister had put the figure at 136 percent. But finance ministry officials said this figure looked too high and that Schaeuble might instead have been referring to a total volume of 136 billion euros for a second Greek rescue package.

The International Monetary Fund (IMF) has said that Greece’s debt needs to be reduced to 120 percent of GDP by 2020 to be sustainable.

That target now looks impossible and there are indications that the IMF, European Central Bank and European Commission would accept a figure of around 125 pct.

A fourth source said Schaeuble had told the meeting of lawmakers from his Christian Democratic Union (CDU) and their sister party, the Christian Social Union (CSU), that the goal was to get slightly below 125 percent.

Chancellor Angela Merkel told the same meeting, according to the first source, that it would be dangerous to allow Greece to default on its debt, saying that could unleash “uncontrollable consequences.”

Earlier, lawmakers said the Bundestag, the lower house of the German parliament, would hold a special session to discuss the Greek rescue plan on February 27.

Reporting by Noah Barkin and Hans-Edzard Busemann, writing by Gareth Jones

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below