CHANCELLOR ANGELA Merkel has ruled out extending the EU-International Monetary Fund programme for Greece any further, saying the country has no option but to reform its structures and boost competitiveness.
The German leader’s tough line, ahead of talks with her Danish, Dutch and Estonian counterparts near Berlin last night, comes amid a visible hardening of Germany’s position towards the Greek government. “Now it’s about completing the programme and yesterday’s parliamentary vote was very important for that,” said Dr Merkel. “But a change to the programme cannot and will not take place.”
She said the priority for Greece and its EU partners was for Athens to return to financial markets as soon as possible with a debt-to-gross domestic product ratio of 120 per cent.
“This is not just about saving but, in addition, structural reforms that will help the creation of better institutions, such as for privatisations and tax collection,” she said.
Asked whether the EU had any concrete new economic stimulus programmes for Greece, Dr Merkel cited recent summit proposals to ease EU funding guidelines to improve cash flow to small businesses.
In a nod to financial tracking structures deemed deficient by the troika, she added: “We are doing everything so that money for growth is available. But this money has to reach the right targets and be given out in the right areas.”
The hardening of rhetoric in Berlin towards Greece can be observed right across the ruling coalition. “There is no alternative to drastic treatment for Greece and the time for that treatment has come,” said Rainer Brüderle, parliamentary leader of Dr Merkel’s junior coalition partners, the Free Democrats (FDP).
More moderate, but equally firm, was German finance minister Wolfgang Schäuble.
“All these measures are not intended to torture anyone – the only intention behind them is to help Greece back onto the path of competitiveness with a growing economy,” he said.
The proposed 20 per cent cut to the €750 monthly minimum wage was, he said, a consequence of Greece’s above average wage levels.
Just as interesting is how, after months of dispute over the merits of austerity, the hard line has spread to the opposition benches.
Jürgen Trittin, Green Party parliamentary leader, called for measures to stimulate the Greek economy yesterday, describing austerity demands as “not right, but necessary”. “The alternative wouldn’t be wage cuts but the insolvency of the Greek state,” he said.