Talk of fresh haircut is counterproductive, Schaeuble tells Greek audience

German Foreign Minister Wolfgang Schaeuble on Thursday hailed Greece's reform efforts, adding however that a lot remains to be done.

"There is no way around structural and fiscal reforms... There is no convenient shortcut," Schaeuble said during a press conference at the Greek-German Chamber in Athens that was attended by his Greek counterpart Yannis Stournaras and Development Minister Costis Hatzidakis.

Schaeuble urged Greece to give up talk about the need for a fresh debt haircut, rejecting speculation as counterproductive. “We have to stick to what has been agreed. Anything else is not in the best interest of Greece,” he said.

After midnight on Wednesday, Greece's shaky coalition government scraped through a vote on a bill to sack public sector workers as thousands chanting anti-austerity slogans protested outside parliament.

After a tense session, 153 lawmakers out of the 293 present voted in favor of the bill, whose passage was required to unlock nearly 7 billion euros ($9.2 billion) in aid from European Union and International Monetary Fund lenders.

Speaking at the conference on Thursday, Stournaras said the crisis presented Greece with an opportunity to overcome its own structural problems. The Greek finance minister said the path for European recovery lies with deeper political and economic integration.

“The things that united Greece and Germany are far more than the things that divide them,” Stournaras said.

Hatzidakis announced the creation of an investment fund with German investment bank KfW aimed at boosting growth in the debt-wracked country.

In an interview with Der Handelsblatt published on Thursday, Hatzidakis predicted that 2013 will be the last year of recession for Greece.