Germany threatens to cut off Greece bailout payments if austerity measures aren’t enacted

MAY 9, 2012 – BERLIN – Beware of EU members bearing bailouts: Leading German politicians warned Greece on Tuesday that the country would not receive a cent more aid unless it fulfills all the conditions of its international bailout. An election on Sunday in Greece failed to deliver a parliamentary majority for the two big pro-bailout parties, plunging the country into political limbo and increasing the risk that another vote may be required to resolve the impasse. On Tuesday, the leader of the Left Coalition party, which benefited from rising anger over austerity to take second place in Sunday’s poll, declared Greece’s policy pledges under its EU/IMF rescue null and void. As Europe’s largest economy, Germany has contributed the biggest share of the financial guarantees under Greece’s bailout, which is paid out in installments on the condition that Athens meets specific savings goals. “The agreements must be respected. I don’t think we can or should renegotiate,” said Martin Schulz, a German politician and president of the European Parliament, on a visit to Berlin. Gerda Hasselfeldt, a senior member of the Bavarian Christian Social Union (CSU), sister party to Chancellor Angela Merkel’s Christian Democratic Union (CDU), echoed Schulz in warning Greece against any backsliding. “Our position is unchanged. Aid can only flow if the conditions are met,” Hasselfeldt told reporters. Greece must push a new round of spending cuts through parliament next month to qualify for an 11.5 billion euros aid installment that it needs to avoid bankruptcy. The post-election deadlock has raised questions about whether that timeline can be met. The vote in Greece and the victory of Socialist Francois Hollande in a French presidential election at the weekend underscored a growing backlash in Europe against austerity measures favored by Berlin as the way out of the single currency bloc’s debt crisis. –Chicago Tribune News

Advertisements