Schauble Says Greece Has Been A "Bottomless Pit" And Its "Promises Are No Longer Enough"
When discussing the Greek vote to pass a request for cash which is based on nothing substantial but merely more pledges to fix its economy in exchange for fresh billions in secured debt (aka bailouts) which will prime at least 136% of the country's GDP with a direct lien, we said all that matters is Germany's response. In which case ths following statement from German FinMin Schauble is likely indicative that this time around Greece will need to literally move mountains to convince Europe it will comply. From Reuters: "Greek promises on austerity measures are no longer good enough because so many vows have been broken and the country that has been a "bottomless pit" has to dramatically change its ways, German Finance Minister Wolfgang Schaeuble said. In a hard-hitting interview with the Welt am Sonntag newspaper, Schaeuble also said it is up to Greece whether the country can stay in the euro zone as part of its efforts to restore its competitiveness. "The promises from Greece aren't enough for us anymore," Schaeuble said. "With a new austerity programme they are going to first have to implement parts of the old programme and save." Yet one wonders just how will Greece first implement the measures from the first one if Europe has to vote tomorrow (or Wednesday, it is all a blur now), on ratifying the second bailout. Or was this weekend's entire Greek exercise merely one of complete irrelevance. In other news, we are fairly confident that February budget revenues are going to come in well below projections, and make the already disappointing January numbers seem like gangbusters.
Schaeuble pointed out that German opinion polls show a majority of Germans are willing to help Greece.
"But it's important to say that it cannot be a bottomless pit. That's why the Greeks have to finally close that pit. And then we can put something in there. At least people are now starting to realize it won't work with a bottomless pit."
Schaeuble said Greece would be supported "one way or another" but warned the country needed to do its homework on improving its competitiveness and hinted it might have to leave the euro zone to do that.
"Greece needs to do its own homework to become competitive -- whether that happens in conjunction with a new rescue programme or by another route that we actually don't want to take..."
When asked if that meant Greece would leave the euro zone for that, Schaeuble said:
"That is all in the hands of the Greeks themselves. But even in the event (Greece leaves the euro zone), which almost no one assumes will happen, they will still remain part of Europe."
As for Germany becoming the neo-feudral master of fiscally incontinent states:
Schaeuble said Germany, the euro zone's paymaster, wants to prevent that.
"We're happy to help but we shouldn't give others the feeling that they don't have work hard themselves. Every country is responsible for itself."
He said that the rescue efforts for Greece are turning out to be more difficult than efforts associated with German reunification in 1990.
"The reason is the realization that there is a need for change, and change dramatically, still needs to develop further with a lot of people in Greece," said Schaeuble, who was a key government architect of German reunification.
Schaeuble said there was quite a difference between Greece and other euro zone strugglers.
"The Greeks are a special case...The Portuguese government is doing a decent job," he said, adding that Portugal's problem is that the country needs more economic growth.
Naturally he is referring to the secret conversation caught on tape between him and Gaspar, which confirms that once the Greek question is resolved one way or another, Portugal is next.