German Finance Minister Wolfgang Schaeuble sent a blunt message to Greece Sunday, basically telling its leaders to stop asking for bailouts and start cutting budgets.
“The most important task facing new prime minister [Antonis] Samaras is to enact the programme agreed upon quickly and without further delay instead of asking how much more others can do for Greece,” said Schaeuble.
Germany’s patience with Greece is wearing thin and dialouge between the two nations suggests a take it or leave it deal for Greece. As eurozone problem nations line up for bailouts, the single currency bloc is going into sink or swim mode, according to The Telegraph. Germany, the largest economy, has the most to lose in any proposed plan to salvage Greeces' government-heavy economy.
For its part, Spain expects to receive up to €100bn (£80bn) of emergency funding for its banks on Monday.
On a related issue, in Brussels, German Chancellor Angela Merkel is expected to hold the line over a eurobond proposal championed by France’s new president, Francois Hollande.
Under Hollande’s proposal, such bonds would mutualise debts of the 17 eurozone nations, which means Germany would play an even larger role in funding bail outs.
Greece’s new three-party coalition government took the helm Thursday, determined to renegotiate the terms of its latest €130bn bail-out, including requesting a two-year extension to the 2014 deadline for slicing its budget deficit to 2.1pc of GDP. Greeces’ 2011 fiscal deficit was 9.3 percent. The two-year extension would cost donor nations €20 billion more in foreign funding.
Schaeuble says “Greece hasn’t tried enough so far, that has to be said quite clearly… no one on Earth who has followed this issue would think that Greece has fulfilled what it has promised.”
Greece’s new leaders, claiming illness, will not be at the Brussels week-end summit to hear that message in person.
Samaras underwent eye surgery on Saturday and incoming finance minister Vassilis Rapanos has been hospitalized with “abdominal pains and dizziness.” Foreign minister Dimitris Avramopoulos and outgoing finance minister George Zanias will fill in for Greeces’ elected leaders.
The illnesses of Greeks new top two has also caused the postponement of Monday’s Athens visit by leaders of the the European Union, European Central Bank and International Monetary Fund.
In a related interview this weekend, Schaeuble again stated Germany’s solid opposition to eurobonds.
“Anyone who has the chance to spend someone else’s money will do that, he said.”
Some interest has emerged for the concept of a new banking union across the eurozone that would presumably restore confidence among depositors, reduce capital flight, allow the ECB to withdraw from its firefighting responsibilities and cut ties between governments and lenders.
The concept of a banking union was backed by the Bank for International Settlements, which said in its annual report: “The conclusion is hard to escape that a pan-European financial market and a pan-European central bank require a pan-European banking system.”
For his part former prime minister Tony Blair recently told the BBC, “The only thing that will save the single currency now is... a sort of grand plan in which Germany is prepared to commit its economy fully to the single currency.”
However Germany’s leaders refuse to discuss such a plan, and many say cooperation from Germany would be vital to its success.