March 24, 2010
The following story about German consent for helping Greece financially was published by EurActiv on 24th March 2010.
Just ahead of an EU summit starting tomorrow (25 March), Germany signalled for the first time that it may accept European financial aid for Greece as a last resort, but only if the IMF is involved and eurozone partners accept tougher budget discipline rules.
A senior German official spelled out on 23 March Berlin’s conditions for any aid mechanism ahead of an EU summit starting on Thursday:
* Greece would have to be unable to access credit markets;
* The International Monetary Fund would have to make a “substantial contribution” to any rescue;
* European Union states would have to agree to negotiate “additional instruments” to enforce budget discipline, beyond existing rules that failed to prevent Athens running up huge debts and deficits that have shaken the euro zone.
A source in Chancellor Angela Merkel’s conservative bloc quoted her as telling lawmakers Germany would only agree to a rescue model combining bilateral and IMF assistance. There would be no decision at this week’s summit but a special EU summit would be called to decide if an emergency arose.
“The condition for action, as a last resort, is that Greece’s financing on the capital markets is exhausted,” the senior official said.
“There are first signs from various capitals that people could envisage financial co-assistance by the IMF,” he said.
European diplomats said France and Germany, co-founders of the single currency, were working on a joint position on Greece for the summit, including a possible role for the IMF, which Paris has hitherto rejected as anathema inside the euro family.
One source said Paris and Berlin had not yet reached a common position and the talks were “very sensitive”.
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