Germany's Finance Minister Wolfgang Schaeuble yesterday ruled out any further concessions to Greece, decribing the current bail-out memorandum as "very accommodating."
During an interview with the Welt am Sonntag newspaper, Schaeuble ruled out any further initiatives to help either Greece or Spain. The FT reported he dismissed speculation that the European Financial Stability Facility would intervene in the Spanish bond market, whilst stating that a Greek euro exit would achieve nothing.
Amidst speculation that Greece is failing to adhere to Troika imposed targets to reduce its deficit, Schaeuble said the current bail-out terms are "very accommodating." He said "I cannot see that there is any room left for further concessions. The problem did not arise because the programme had faults, but rather because Greece did not implement it fully enough."
Former Greek finance minister and current leader of PASOK, Evangelos Venizelos, disagrees with Schaeuble's assessment. Wall Street Window reported Venizelos blamed the deeper than predicted Greek recession for the government's failure to deliver on cuts. He explained it was almost impossible for the newly elected coalition government to deliver on cuts worth €11.5 billion in 2013 and 2014 because the economic situation had deteriorated still further.
Venizelos said "From the start, in 2010, the big problem in our relationship with the troika has been that all the projections, all the macroeconomic numbers - and the most important one, the recession - have not turned out to be correct."
The double election has also been churned out as an excuse for politicians to take their eyes off the economic ball, putting the economy on hold whilst they concentrated their attention on their own re-election. After wasting several months over elections, Parliament is now in recess for the summer, with no efforts made to make up for lost time.
The government has now come up with proposals to present to the troika for €10 billion of the required €11.5 billion of cuts. However, it is widely expected that further austerity measures will only force the Greek economy into deeper recession as cuts are not combined with measures to promote growth.