Schäuble Visits Greece: Aid but No Haircut for Athens
German Finance Minister Wolfgang Schäuble pledged €100 million to help small and medium-sized business in Greece during his visit to Athens on Thursday. But he didn't bring what the country really wants: a new debt haircut.
It's a good day for pedestrians in Athens. Several streets in the Greek capital have been blocked off, leading to heavy traffic away from the center. Everyone knows the cause of the chaos. His name adorns the front pages of newspapers and escapes from the radio of a passing motor scooter: Schäuble.
When the German finance minister arrived in Athens on Thursday morning, security was tight. As a precaution, the police banned "all outdoor meetings and demonstrations" for the entire day. Schäuble, after all, is unpopular in Greece, with many in the country seeing him as the author of their austerity suffering. He is, in short, an unwelcome guest.
Yet only shortly after his arrival, Schäuble sought to improve the atmosphere, praising Greece's progress in combating the debt and economic crisis that has plagued the country for the last six years. Athens has made "great strides in consolidating its economy," he said at a press conference at the German-Greek Chamber of Industry and Commerce in Athens. The Greeks are facing hard times, said Schäuble, but there is no other way.
Schäuble called on Athens to continue the process of privatizating government-owned companies and expressed confidence that the economy will soon begin to grow again. "We are working side by side" toward that goal, he said, though added a warning that the euro crisis has still not been overcome.
And, as any good guest, Schäuble also brought presents for his hosts, announcing that Germany would be participating in the formation of an investment fund in Greece. Berlin has signalled it would contribute 100 million to the half-billion euro fund aimed at providing affordable loans to small and medium-sized businesses in Greece -- a sector that is currently having trouble obtaining funding from Greek banks.
Still, Schäuble didn't bring along what Athens most wants -- a new debt haircut. Even before he boarded his plane for the Greek capital, Schäuble sought to lower hopes that he might reconsider his opposition to such a course of action. In a brief interview with German radio, the finance minister said that "nobody who understands the situation is talking about a further debt cut for private creditors."
As is often the case with Schäuble, the statement was not entirely straightforward. The discussion recently has been one focussing on debt reduction with the involvement of Greece's public creditors -- central banks holding Greek sovereign bonds, for examble -- not private creditors. Still, his comment was consistent with past statements in which he has excluded the possibility of a further debt cut.
Greece, however, has chosen to largely ignore such rhetoric. Earlier this month, Greek Economy Minister Kostis Hatzidakis told a German paper that he expects such a debt haircut in the near future. And on Thursday, Greek Finance Minister Yannis Stournaras appeared to echo that demand. "Once we have a balanced budget, a new approach will be open to us," Stournaras told SPIEGEL ONLINE on the sidelines of his meeting with Schäuble.
'We Who Are About to Die Salute You'
The Greek press varied in its reactions to the Schäuble visit. On the cover of left-wing newspaper Eleftherotypia on Thursday, an illustration shows the collapse of the Greek economy, triggered by the harsh austerity programs. "Mr. Schäuble, this is your doing: gross domestic product minus 20.5 percent; retail minus 18 percent; construction industry minus 67 percent," reads the headline. And unemployment has now exceeded 27 percent. The newspaper Avgi wrote: "Hail Schäuble, we who are about to die salute you." In contrast, the conservative press reported on Schäuble's visit more objectively. The business-friendly Kathimerini wrote, "Schäuble Brings an Investment Fund."
The Greek opposition has repeatedly attacked Schäuble in recent months. It's the German finance minister's first visit to Athens since the beginning of Greece's ongoing crisis. His short trip also included a meeting with Prime Minister Antonis Samaris on Thursday afternoon.
On Wednesday night the Greek parliament approved by a narrow majority a controversial austerity program. It includes the elimination of thousands of public-sector jobs by the end of 2014. There have been violent protests throughout the country against the newly approved program.
Correction: Through an earlier translation error of a quotation in this story, we erroneously suggested that Greece has a balanced budget. The mistake has been corrected.
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