Bloomberg News

Merkel Sees No Leeway for Greece, Rejecting Signals of Softening

June 18, 2012

German Chancellor Angela Merkel said Greece shouldn’t be granted leeway on terms for its bailout, rejecting signals from her foreign minister that creditors may relent on austerity measures.

The statements by Merkel today at the Group of 20 summit follows a victory in Greek elections for parties supporting the bailout. It clashes with indications made by euro-area finance ministers and German foreign-policy chief Guido Westerwelle, who said Europe could consider giving Greece more time.

“The important thing is that the new government sticks with the commitments that have been made,” Merkel told reporters at the G-20 meeting in the Mexican resort of Los Cabos. “There can be no loosening on the reform steps.”

Merkel, who has rejected a range of crisis-fighting policy options from jointly issued debt to stimulus funding, added a softening of demands on Greece to the list of measures Germany would reject.

“Mrs. Merkel is positioning herself for making the minimum concessions that she can get away with, but there is no way that she can insist that there will be none,” Yanis Varoufakis, a professor at the University of Athens, said on Bloomberg Radio’s “On the Economy With Michael McKee.”

Euro-area finance ministers said yesterday in a statement that international monitors would return to Greece as soon as a new government is formed and “exchange views” on the way forward.

Westerwelle told broadcaster ZDF that negotiators could “do something in terms of the time frame” in Greece, since the past weeks of political stalemate has “done damage.” German government spokesman Georg Streiter queried those comments today in Berlin, saying “this is not the time for some sort of rebates.”

To contact the reporters on this story: Tony Czuczka in Los Cabos, Mexico at aczuczka@bloomberg.net; Patrick Donahue in Berlin at pdonahue1@bloomberg.net

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


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