Bloomberg News

Greece’s ‘Hard Way’ Is Only Path Back, Germany’s Kampeter Says

February 02, 2012

Feb. 1 (Bloomberg) -- A default wouldn’t help Greece and is not an option to end the country’s debt crisis, German Deputy Finance Minister Steffen Kampeter said, calling on the government in Athens to deliver on budget cuts.

“Nobody gets any profit” out of Greece exiting the euro, Kampeter said in an interview broadcast today by Bloomberg Television. “They have to do it the hard way.”

European Union leaders left a Jan. 30 summit in Brussels without an accord over how to plug Greece’s widening budget hole. Greek Prime Minister Lucas Papademos said he would try to meet German-led demands for a bigger debt writedown by investors and deeper budget cuts by his government.

“We’re a bit concerned that Greece will not be willing to deliver in time,” Kampeter said in the interview, which was conducted in New York yesterday. “We’re not out of the plan, we’re just on track, but Greece has to deliver the next step.”

There’s growing resistance among lawmakers from Chancellor Angela Merkel’s coalition to boost an October offer of 130 billion euros ($170.7 billion) of loans in a second aid package for Greece. More than 40 lawmakers are considering rejecting the new bailout, which may result in Merkel having to rely on the backing of opposition parties to pass the motion in parliament, the Bild-Zeitung newspaper said today.

“First you have to clarify what the Greeks can deliver and then all the European nations will answer what to do,” Kampeter said. “You only get solidarity when you offer solidity and solidity means reforms in Greece and fiscal consolidation.”

Debt Load

The euro region’s debt levels are too high to enable governments to boost economic growth through spending, Kampeter said in response to criticism that the crisis-fighting plan is to too tilted to austerity.

“Fiscal consolidation is the other side of the medal that leads to growth,” he said. “The century where everybody is saying that debt-fueled growth is the measure to take, I think this century is gone.”

Asked whether he would be in favor of the European Central Bank making a voluntary contribution to reducing Greece’s debt load, Kampeter said he has “no doubt that the European Central Bank will do what is their task, on the one hand to keep the money stable and on the other hand to keep the financial markets working.”

--Editors: James Hertling, Simone Meier

To contact the reporters on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net; Sara Eisen in New York at seisen2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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