Germany Throws A Wrench Into The Works………..

Posted By on April 26, 2010

Germany refuses to help Greece unless it agrees to tougher terms
Germany’s finance minister Wolfgang Schauble has raised fresh obstacles to the €40bn (£35bn) aid package for Greece, warning that Berlin will not transfer funds until Athens agrees to tougher terms.

 By Ambrose Evans-Pritchard and Edmund Conway

 Published: 10:47PM BST 25 Apr 2010

Mr Schauble said no decision had yet been taken by Berlin or the European Union and that the outcome may yet be “negative”. “It depends entirely on whether Greece goes through with the strict austerity in coming years,” he told Bild Zeitung.

George Papaconstantinou, Greece’s finance minister, insisted in Washington that the Germans were “completely on board” and that other EU states and the International Monetary Fund would provide a bridging loan if necessary. He said funds “will lose their shirts” if they have taken short bets on Greek debt. “I want to categorically state that any restructuring is off the table.”

Mr Papaconstantinou also warned that other EMU states with big debts could fall foul of the markets. “What we are talking about is not merely a Greek problem. There are broader issues around the eurozone.”

Dominique Strauss-Kahn, head of the IMF, said everybody involved “recognises the need for speed. We are all aware of the seriousness of the situation and the courageous efforts being made by the Greek people.”

Mr Schauble will meet Bundestag leaders today (Monday) amid rising doubts among Free Democrats (FDP) and Bavaria’s Social Christians (CSU) over the wisdom of open-ended help.

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