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Thursday 7 December 2023 Dublin: 9°C
greek unorthodox

Germany and Greece have settled their bailout differences (for now)

German politicians have just approved the troubled country’s four-month extension.

GREECE’S MAVERICK FINANCE Minister has called a hard-fought EU deal securing a bailout extension a “fig leaf” which was vaguely worded to secure approval by European parliaments.

“We are proud of the level of vagueness,” Yanis Varoufakis said of the agreement signed with eurozone finance ministers in an interview with Antenna TV.

The outspoken Greek minister said this was “deliberately done” at the suggestion of Greece’s EU creditors “otherwise it would not be approved by (their) parliaments.”

“The deal was a fig leaf to conclude the Eurogroup and dispense with the fiscal agreement (Greece’s bailout deal),” he said.

The statements were made as lawmakers in Germany – one of Greece’s toughest critics – voted overwhelmingly in favour of the agreement that gives Athens four months to work out a new reform blueprint.

Germany’s deeply pro-European Finance Minister Wolfgang Schaeuble had vigorously urged MPs to approve the breathing space for debt-wracked Greece, stressing Athens must also live up to its promises.

“I’d like to ask parliament, each lawmaker, not to reject the request by the finance ministry, which wasn’t easy for me either, because this would do great harm to our people and our future,” Schaeuble said.

Schaeuble, who has traded barbs with Athens in recent weeks, said that the peoples of Europe were a “community” based on solidarity where those currently better off help those in difficulty.

We, and especially Germany, will have a good future in the 21st century only if European integration remains successful and if we stand united in Europe.”

Belgium EU Greece Bailout Virginia Mayo Greek Finance Minister Yanis Varoufakis Virginia Mayo

‘The coffers are empty’ 

The hard-left Greek government was elected last month on pledges to eliminate austerity and erase most of the country’s huge public debt.

In Tuesday’s deal, Athens pledged to refrain from one-sided reform rollbacks but received no money to deal with a pressing debt repayment schedule.

In March it must repay over €1.5 billion to the International Monetary Fund, followed by the same amount in June.

Germany Greece Michael Sohn Schaeuble and Varoufakis Michael Sohn

But Varoufakis admitted on Friday that “at this moment the coffers are empty.”

In another interview with Bloomberg this week, the minister said he was counting on the European Central Bank to rescue Greece by handing over €1.9 billion in Greek bond profits.

“The ECB could simply hand over this money to the IMF,” he said.

I find it very hard to imagine that Europe and the IMF will allow us to trip over what is a relatively small cash problem.”

- Additional reporting Peter Bodkin

READ: Greece really, really wants to stay in the eurozone after all >

READ: Greece should take Ireland’s ‘middle road’ on debt – not the ‘nuclear option’ >

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