German Finance Minister Wolfgang Schaeuble. PHOTO: AFP
But he also said no deal had been reached yet between Athens and European Union negotiators on another financial lifeline for the country, as fears mount that it will default on its massive debt.
“Most market participants are telling us that they have priced in whatever will happen,” Schaeuble said at the Council for Foreign Relations in New York.
But as for Greece leaving the eurozone, he noted, “I would like to say that I am quite confident it will not happen.”
However, he added, “until now we don’t have a solution. And I don’t expect to get a solution in the next week.”
Greece’s new leftist, anti-austerity government has been repeatedly rebuffed on efforts to secure more financing to service its debts while it negotiates what it hopes will be lighter reform requirements under its bailout programme from the International Monetary Fund, the European Commission and the European Central Bank.
The country’s cash resources have become extremely tight and fears are that it will miss crucial debt repayments in coming weeks without a new agreement. Eurozone finance ministers will meet to review Greece’s proposals on April 24, the deadline for an agreement.
But Schaeuble said the Greek government had gone backwards, in terms of implementing reforms and rebuilding competitiveness, key goals of the IMF-EU bailout.
“The most important thing Greece achieved in the past years was reducing wages. That increased competitiveness,” Schaueble said. “In the last couple of months they have destroyed this development. It’s a tragedy.”
“Greece must become competitive. Otherwise it’s a bottle without bottom.”
Published in The Express Tribune, April 16th, 2015.
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