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No quick fix for Greece, warns Schäuble

The Local | 8 Nov 2012, 17:36

German Finance Minister Wolfgang Schäuble said on Thursday he did not expect any quick deal on aid to help debt-mired Greece, from its international creditors.
 

"At the moment I do not see the decisions being taken," that are necessary for a definitive accord between the troika of international auditors examining Greece's finances and the Greek government, he said.

The German minister added that an agreement was unlikely to happen "in the coming weeks" despite sweeping austerity measures passed by the Greek parliament late on Wednesday.

Schäuble, who with Chancellor Angela Merkel has shaped the response to the Greek debt turmoil in Germany, Europe's biggest economy and the eurozone's effective paymaster, nevertheless welcomed the cutbacks.

The Greeks have "a pro-European majority and it held last night despite demonstrations and a general strike," he told a conference in the northern city of Hamburg.

"All is not lost - all is not won either but we have no use for cynicism... the Greeks want to remain in the euro."

Schäuble said the trend in Greece was clearly going in the right direction but that external challenges would make the crisis harder to resolve.

"We are on the way to solving the problems step-by-step," he said.

"On the other hand we have weaker growth in the global economy as a whole and that weighs on our ability to grapple with the euro crisis."

Schäuble said that the countries using the euro had a "certain confidence bonus on the markets" but noted it remained "fragile".

"We need to deliver," he warned.

The Greek parliament approved €18.5 billion in budget cuts demanded by its creditors, full of bitter pills for average Greeks.

The tough measures to be implemented by 2016 include raising the retirement age to 67, slashing benefits and cutting the minimum wage.

The package is necessary for Greece to receive a €31.5-billion tranche of aid from its international creditors - the European Union, International Monetary Fund and European Central Bank.

German Foreign Minister Guido Westerwelle had earlier on Thursday welcomed the austerity package, calling it "an important affirmation of the consolidation and reform policies that are needed".

"This message will be heard throughout the eurozone," he said in a statement.

"We have great respect for the sizeable efforts made by many people in Greece to surmount the crisis. Europe and Germany stand in solidarity behind Greece and the reform course on which it has embarked."

Also at the conference Schäuble said all European nations must become "more competitive" to offset their "ever-growing risk aversion, their diminishing readiness to innovate, their higher spending and claims on social welfare systems, and their demographic trends".

AFP/hc

 
 
 
 
 
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