Schäuble: The Greek optimism is unfounded – I do not rule out a bankruptcy

Schäuble: The Greek optimism is unfounded – I do not rule out a bankruptcy

Athens, May 22, 2015/ Independent Balkan News Agency

As unjustified characterizes the optimism of the Greek government on the possibility of reaching an agreement with its lenders, the German Finance Minister Wolfgang Schaeuble, reiterating that a Greek default cannot be excluded.

“What I know from discussions with the three institutions does not justify the optimism reflected in  the announcements coming from Athens”, Schaeuble said, adding that the talks are progressing “very reluctantly”.

Asked if Greece is closer to bankruptcy, the German finance minister said that the situation is in the hands of Athens, however, he noted that “I cannot rule anything out”.

“I can understand the general feeling for political solutions. But it is not justified, “Schaeuble said and added that the Greek issue will be discussed on the G7 meeting next week in Dresden.

Movement of leading economists: Give Greece a chance – Do not continue the Greek tragedy

Support Movement for Greece by leading economists and political analysts of the Eiffel Group and Glienicke Group published Thursday in its website the Bruegel institute, asking to reach an agreement but to not “drown” the economy.

The supporting text is titled “Give Greece a chance” and is signed by Agnes Benassy-Quere, Yves Bertoncini, Jean-Louis Bianco, Armin von Bogdandy, Henrik Enderlein, Christian Callies, Marcel Fratzscher, Clemens Fuest, Sylvie Goulard, Andre Loesekrug -Pietri, Franz Mayer, Rostane Mehdi, Daniela Schwarzer, Denis Simonneau, Maximilian Steinbeis, Constanze Stelzenmüller, Carole Ulmer, Shahin Valee, Jakob von Weizsäcker and Guntram Wolff. “The Greek tragedy must not continue”, says the text, noting that the growing dissatisfaction in Europe with the new Greek government has led some to recommend the suspension of negotiations or even accepting a Grexit, a development which will be a “collective political failure” and will cause the social and economic devastation of Greek citizens.

Leading analysts nevertheless stress that the stay of Greece in the eurozone at the expense of the citizens of other countries would also be a failure, saying characteristically that the “sovereignty” of each country must be respected.

“Time is running out for the Greek government, which has to decide immediately whether to proceed with the reform of the country. It still has a considerable advantage, the clear mandate for a new start in the country, away from the old elite that destroyed it. But faces a serious challenge: the fact that it won this mandate with promises that could not in any case meet “, says the text.

It actually noted that a failure to resolve the Greek crisis will have a significant cost for Europe: “The eurozone might have have limited the chances of transmission of the Greek crisis through certain ‘firewall’, but we should not underestimate the danger of changing the attitude of markets, will not consider participation in the eurozone as a permanent and irreversible commitment”.

“The resolution of the Greek problem ultimately is a test of the ability and willingness of Europe to work towards a workable monetary union. It is a test of how strong is the new institutions and structure and how many steps still need to be taken to deepen the institutional integration of the euro area. Sooner or later, the lessons from the European crisis should be exploited through changes to the founding Treaties”, highlight the distinguished economists.

With regard to the actions that must be taken, the article underlines that Greece must first commit to reliable economic reforms in return for European solidarity in the form of emergency grants and a third aid program.

These reforms should include the creation of an independent tax collection agency, an enhanced privatization plan, a reform of the pension system to make it sustainable in the long term, a quick return to reasonable fiscal primary surpluses and a reform in goods markets and services markets, in order to introduce competition and ensure price adjustment.

“A referendum on the status of reforms and stay in the eurozone should be considered as a last option for Greeks… Greece needs urgently to choose its destiny. Europe must offer solidarity in Greece and the conditions to prosper in the eurozone. But it must be prepared for all eventualities, including a unwanted and costly Grexit”, the text concludes.