German government looks to moderate growing Greece tensions ahead of elections
Germany's finance ministry is attempting to diffuse growing tensions over Greek aid in the run-up to next month's elections.
Spokesman Martin Kotthaus said today that Greece is fulfilling the terms of its aid programme, and that the situation will be reviewed in 2014. He ruled out another restructuring of Greek sovereign debt, but added that recent data shows that "at the end of the tunnel there is light".
Kotthaus' remark was made following a statement from German finance minister Wolfgang Schauble yesterday that Greece may need a third bailout – something that has proved very unpopular with the German public.
Steffen Seibert, spokesman for German chancellor Angela Merkel, said there was no dissent between Merkel and Schauble on the matter. Speaking after a cabinet meeting earlier today said that nothing new on Greek aid was discussed, and that decisions on the issue remain in the hands of the Eurogroup of finance ministers.
Kotthaus said Schauble's announcement didn't signify anything new – he and his fellow Eurozone finance ministers have always made clear they would support Greece after the current program ends at the end of next year. He added that there are no deliberations at the European level on details of a third Greek programme either.
But tensions are running high in Greece too. Speaking to the BBC last night, Greece’s former finance minister George Papaconstantinou said there was a “hatred” in Greece towards "some" fellow EU members. He said a number of countires – mostly Germany – are under the impression that, if Greece took more austerity measures, there would be no need for a bail out.
Germany's central bank head Jens Weidmann warned against invoking a Eurozone break up. In an interview with German monthly Capital to be published tomorrow, Weidmann said an exit from the euro would have "grave consequences for the countries affected, as well as for everyone else".
Monetary union is not some sort of club, which you can easily quit and then quickly sign up to again. Whoever suggests it underestimates the interconnectedness of the different eurozone economies. An exit would also have far-reaching consequences for our banks and companies.