Germany Rejects Loan Request Saying Greece Must Meet Conditions

The Greek proposal “doesn’t meet the criteria agreed upon in the Eurogroup on Monday,” German Finance Ministry spokesman Martin Jaeger said in an e-mailed statement. “In truth, it aims at bridge financing without meeting the requirements” of the rescue program. European Commission Spokesman Margaritis Schinas moments earlier had said the Greek letter could be the basis for a “reasonable compromise.”

With the Greek state and its banks shut out of financial markets and dependent on emergency aid to stay afloat, Prime Minister Alexis Tsipras is retreating from his pledges to end austerity as the country’s creditors tighten the financial vise. While he’s not yet gone far enough to satisfy Germany, Greek bonds held on to earlier gains as a spokeswoman said Finance Minister Wolfgang Schaeuble still plans to meet his euro-region counterparts in Brussels on Friday.

“No agreement would lead Greece to default,” Malta’s Finance Minister Edward Scicluna said in an interview. “Once you default, it’s a terrible thing.”

Greek Goals

Varoufakis said he wants the European Central Bank to re-introduce a waiver allowing its debt to be used as collateral in refinancing operations as a result of the extension. That would ease the financial restrictions that have helped wring concessions from Tsipras. Without a financial backstop, Greece is on course to default on some of its liabilities as early as next month.

Flexibility

Varoufakis said the extension will also allow Greece to agree on supervision by the European Union, the ECB and the International Monetary Fund and give officials time to negotiate a new deal to allow his country to prosper within the currency union, while making “best use of given flexibility in the current arrangement.”

Full article: Germany Rejects Loan Request Saying Greece Must Meet Conditions (BloombergBusiness)

 

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