NEWS

German FinMin urges Greece to stop speculation of new debt haircut [update]

'We have to stick to what has been agreed,' Schaeuble tells Athens audience

Greece must stop lobbying for a second restructuring of its debt, German Finance Minister Wolfgang Schaeuble warned on Thursday, saying that was not in the country's best interests.

“My advice is not to continue this discussion,” Schaeuble told a Greek-German Chamber of Commerce event during a visit to Athens. “We have to stick to what has been agreed. Anything else is not in the best interest of Greece.”

“Another haircut beyond the 53 percent for the private sector is not doable,” he said at the conference that was attended by his Greek counterpart Yannis Stournaras and Development Minister Costis Hatzidakis.

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.

Meanwhile, Greece's Development Minister 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.

Tight security

More than 4,000 police officers were on duty Thursday for Schaeuble's one-day visit during which he will meet conservative Prime Minister Antonis Samaras and other senior Greek officials.

Demonstrations have been banned throughout Athens during the trip.

Police placed parliament and the city's main Syntagma Square off limits to protesters, in security measures that were more extensive than those reserved for heads of government. Busy downtown subway stations were also closed for the day, while traffic restrictions were imposed along the route from Athens International Airport into the capital.

Leftist SYRIZA opposition described the police measures as “fascist and undemocratic.” [Combined reports]

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