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Greek debt crisis – Angela Merkel still open for talks

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Greek debt crisis

Angela Merkel still open for talks

The economic assistance programme for Greece will end on Tuesday night. Should the Greek government request further negotiations following Sunday’s referendum, the door will be open, said Angela Merkel in Berlin.

Solidarity on the one hand and taking responsibility on the other are two sides of the same coin, says ChancellorPhoto: Bundesregierung/Steins

Once the second economic assistance programme for Greece ends, there is no longer any programme basis, said Chancellor Angela Merkel in Berlin. The Greek side was not prepared to compromise, she said. The Chancellor had earlier invited the heads of the CDU/CSU, the SPD, the Greens (Die Grünen) and the Left Party (Die Linke) as well as the heads of their parliamentary groups in the German Bundestag to the Federal Chancellery to inform them about the latest developments in the Greek situation.

Eurogroup’s offer generous, says Chancellor

According to Angela Merkel, however, the door remains open. Greece has called a referendum on Sunday on the last offer of the country’s creditors. Should the Greek government request negotiations after the referendum, “we will obviously not reject negotiations of this sort”.

The Eurogroup made Greece a generous offer, declared the Chancellor. It is the legitimate entitlement of the Greeks to hold a referendum, and the result will be accepted, she said. But it is equally the legitimate right of the other 18 euro-zone states to take their own stance.

Responsibility and solidarity

The Chancellor repeated that the euro “is in a more robust state of health today than it was five years ago, which puts us in a much better position to master the crisis”. Again she stressed that “responsibility on the part of the individual members and solidarity on the part of the others are two sides of the same coin”. This is one of the fundamental principles of the economic and monetary union.

The Chancellor explained her statement that “If the euro fails, Europe fails,” as meaning that there must be the will to compromise on all sides if the euro is to hold together. If this proves impossible, the euro is seriously jeopardised.

Debate in the German Bundestag on Wednesday

Angela Merkel announced that the German Bundestag would debate the Greek situation on Wednesday. She will be speaking for the government along with Federal Economic Affairs Minister Sigmar Gabriel and Federal Finance Minister Wolfgang Schäuble.

No special Eurogroup summit is planned, nor is any trip to Greece scheduled.

The Greeks want a different euro zone, says Sigmar Gabriel

Federal Economic Affairs Minister Sigmar Gabriel explained the “qualitatively new programme” offered to the Greeks. It took account of the social situation in Greece and paved the way for a third economic assistance programme. Greece, however, was not interested in submitting its own reform proposals, he reported. Sigmar Gabriel stressed that it is not only the Greek government that is accountable to its people. The governments of the other 18 euro-zone states are every bit as accountable to their own people.

As Sigmar Gabriel sees it, the Greek government either wants a different euro zone, or is simply not prepared to comply with the rules of the euro zone. This is a “politically and ideologically” motivated stance. The euro zone, however, needs “commitments” – more rather than less. Sigmar Gabriel thus sees the referendum on Sunday as the decision of the Greek people for or against the euro zone. Should there be a “Yes” vote in the referendum, new negotiations could follow. The euro is a stable and secure currency.

No danger for the German budget

Greece will remain a member of the euro zone and of the European Union. Greece has not yet defaulted. Even if the country is unable to repay interest on or instalments of European and international loans, this would not have any short-term consequences for the German budget. Because of the long-term nature of Greece’s repayment commitments, any impact would be very gradual and spread over a period of several years, said Federal Finance Minister Wolfgang Schäuble. The concomitant financial challenges will not jeopardise Germany’s guideline of producing balanced budgets for the foreseeable future.

The negotiations between the Eurogroup and Greece over an extension of the second economic assistance programme broke down on 27 June. The Greek government broke off the negotiations and called a referendum for 5 July. Greek voters will be asked to accept or reject the last offer made by the country’s creditors (International Monetary Fund, the European Central Bank and the European Commission). The Greek government is advising the Greek people to vote “No”. The economic assistance programme will now end on 30 June. The Greek government has closed the country’s banks for a week until 5 July, and has introduced capital control measures. On 30 June Greece must repay a 1.6 billion euro loan to the International Monetary Fund (IMF). It is unclear whether or not it will be able to do so.

Monday, 29. June 2015

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