Bending on Bailouts

Schäuble Willing to Ease Up on Greece

Schauble by Getty images
Wolfgang Schäuble may ease up on Greece.
  • Why it matters

    Why it matters

    The International Monetary Fund insists that Greece needs debt relief and the European Union must come up with a compromise if it wants to keep the organization involved in the bailout program.

  • Facts

    Facts

    • Greece’s parliament will vote on a new package of tax hikes and reforms demanded by its international lenders on Sunday.
    • Two days later, euro zone finance ministers assess whether Athens qualifies for much-needed bailout loans.
    • The IMF believes that without debt relief, Greece will miss targets for GDP recovery in 2018.
  • Audio

    Audio

  • Pdf

Germany has been at loggerheads with the IMF over whether Greece should be given any sort of relief on its debts, but documents seen by Handelsblatt show that its finance minister, Wolfgang Schäuble, may be softening his stance on the issue.

Mr.  Schäuble, a member of the center-right Christian Democrats, has always insisted Greece must stick to the debt payments as part of its bailout package, but in a recent, confidential letter to Germany’s parliamentary budget committee, he said he may consider some form of relief after 2018.

In the letter the finance ministry indicated its willingness to bring the debt burden to a workable level. “These measures are subject to the condition of a complete implementation of the program in 2018,” reads the document, which Handelsblatt has obtained.

In other words, Mr. Schäuble is willing to accept debt relief for Greece, but only after the current aid program ends. At the moment, the German parliament has to vote on any alterations to the terms of the bailout for Greece and the German government is not willing to stir up that particular hornets nest before the German general elections, which will be held in the fall of 2017.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.