Greek Rescue

Sticking It to Germany

Greek finance minister Yanis Varoufakis in French magazine Match Source Getty Images 42418579
Still time to play despite Greece's debt problems: Yanis Varoufakis, the Greek finance minister, gave an interview to French magazine Paris Match, and glossy pictures showed him and his wife.
  • Why it matters

    Why it matters

    If Greece loses support from Germany, it may not be able to get European approval for new funds to avert a bankruptcy and euro exit.

  • Facts

    Facts

    • Greece is still in talks to get another reimbursement of a 240 billion euro rescue package from its international lenders, including Germany.
    • The chance of agreeing on giving financial support “is increasingly become smaller,” a German government source told Handelsblatt.
    • A majority of 52 percent of Germans is currently against Greece staying in the euro zone, compared with 41 percent a month ago, a poll showed on Friday.
  • Audio

    Audio

  • Pdf

Greek ministers are on a crusade to win support in Germany for the country’s euro bailout, but their deeds and words seem to be doing the opposite.

A video of the Greek finance minister, Yanis Varoufakis, raising his middle finger to Germany was shown on television Sunday, but Mr. Varoufakis said the video, from a 2013 speaking appearance in Zagreb, Croatia, when he was a professor, had been manipulated.

What wasn’t doctored was the Bild newspaper interview on Saturday by the Greek defense minister, Panos Kammenos, who accused the German finance minister, Wolfgang Schäuble, of “poisoning the relations between the two countries” and corruption.

Germany’s willingness to help Greece appears to be fading, although an economist said a last-minute face-saving deal was still likely.

“To be honest: this is enough. It cannot continue as it is. This is not how people treat each other.”

Sigmar Garbriel, German vice chancellor and economics minister

“The case is simple: Either the Greeks deliver or they don’t deliver,” a person familiar with the German government’s thinking told Handelsblatt, referring to Greece’s promises to reform and reduce spending in return for aid.

The chance of agreeing on financial support “is steadily getting smaller,” the person added.

Mr. Schäuble last week, in an interview with an Austrian broadcaster, did not rule out a de facto exit of Greece from the single currency zone of 19 European countries.

A deal to get another disbursement of Greece’s current €240 billion bailout package, of which €7.2 billion has not yet been paid by international creditors, was still possible, but a new program has become more difficult, said Christian Schulz, a London economist at German private bank Berenberg.

“Even if there are difficulties at the moment, we expect Greece to take the required actions and get at least part of the money and make it to the end of June,” Mr. Schulz told Handelsblatt Global Edition.

“When it comes to an additional program, that’s needed to meet debt repayments in July and August, it will be more difficult. This requires approval of the German parliament, which currently has a rather negative disposition due to Greece’s rethorics,” Mr. Schulz said.

 


In the video, Mr. Varoufakis is seen showing his middle finger but he says the movie from 2013 is manipulated. The authenticity of the video is still being investigated.

 

The statements by the Greek finance and defense ministers have not helped Greece’s position in Europe, Mr. Schulz said.

The Greek finance minister, Mr. Varoufakis appeared on a German prime time talk show on Sunday to discuss his country’s finances but wound up having to defend his appearance in a video from 2013, where he is seen showing his middle finger.

Mr. Varoufakis, who has also come under criticism for appearing in a French magazine with glossy photos of himself and his wife, denied on the TV show he raised his finger, saying the video had been manipulated.

In the video, Mr. Varoufakis said in English: “My proposal was that Greece should simply announce that it is defaulting … within the euro in January 2010 and stick the finger to Germany, and say, well you can now solve this problem by yourselves.”

Mr. Kammenos, the Greek defense minister who had accused Mr. Schäuble of corruption, drew criticism from Sigmar Gabriel, the German economics minister and vice chancellor.

 

Greek finance minister Yanis Varoufakis and wife roof terrace in French magazine Paris Match March 2015 Source Getty Images 42418451
The Greek finance minister, Yanis Varoufakis, and wife Danae Stratou, posing on their roof terrace in Athens for the French magazine Paris Match. Source: Getty Images

 

“I really can’t understand these continuous attacks on Germany any more, nor the personal insults to the German finance minister Wolfgang Schäuble by Greek government representatives,” Mr. Gabriel told German newspaper Bild on Sunday.

“To be honest: This is enough. It cannot continue as it is. This is not how people treat each other,” Mr. Gabriel said.

The mood is also changing among Germans, according to a poll on Friday by German state broadcaster ZDF.

A majority of 52 percent of Germans are against Greece staying in the euro zone, compared with 41 percent a month ago, the poll showed. At the moment, 40 percent think Greece should keep the euro, while 8 percent are undecided.

Greece’s debt agency is due to repay about €580 million of loans today to the International Monetary Fund, and Mr. Schulz, the economist of bank Berenberg, said he expected this to be possible because the country still had means to do so.

In the German TV show, Mr. Varoufakis said Greece’s liquidity problems were “insignificant” and “small.”

 

Jan Hildebrand leads Handelsblatt’s financial policy coverage from Berlin. Gerd Höhler is a Handelsblatt correspondent based in Athens. Gilbert Kreijger is an editor with Handelsblatt Global Edition in Berlin. To contact the authors: kreijger@handelsblatt.com, hoehler@handelsblatt.com and hildebrand@handelsblatt.com

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