German Finance Minister Wolfgang Schaeuble expressed his support for Greece’s ongoing economic reform program and pledged to back a fund to support small businesses during a lightning visit to Athens on Thursday, but he ruled out a second debt restructuring, at least for this year.
Amid tight security that closed down much of the city center, Schaeuble was shuttled from meetings with Greek and German business representatives to talks with Prime Minister Antonis Samaras and other government officials, where he repeated his conviction that Greece had made “impressive” progress in its reform drive while stressing that persistence with structural reforms was the only way the country could emerge from the crisis.
Schaeuble appealed to Greeks to “stop the discussion about a new debt haircut,” saying that “it is not to your benefit.” He added, however, that the issue could be revisited in late 2014 “if Greece has implemented reforms and achieved a primary surplus.”
During his 40-minute meeting with Samaras, Schaeuble reportedly expressed optimism at the progress of the country’s reform program, noting that “the cup for Greece is much fuller than it was.”
Later in the day, Greek and German officials signed an agreement for the creation of an investment fund to bolster small and medium-sized Greek businesses. The fund, which is to be modeled on Germany’s state-owned bank KfW, is to get 350 million euros in funding from Greece, including 200 million euros in European Union subsidies, and 100 million euros from Germany.
In an interview with Skai television, Schaeuble stressed the importance of Greece pushing through structural reforms to revive the economy, noting that “if you can’t make your economy competitive in this world of globalization, then you enter a downward spiral.”
Schaeuble highlighted two bright spots in the Greek economy, describing the boom in the tourism sector as “a success story for this year” and remarking on the boost in Greek exports, particularly to non-European countries.
The German minister also emphasized, several times during the interview, his respect for the pain of Greeks burdened by austerity and praised those who last summer “voted for a stable government.” He stressed that he was not visiting Greece as an inspector. “I am not the troika,” he said. “That’s not my job.”
On the contentious issue of Greece’s long-standing demand for war reparations from Germany for losses sustained during World War II, Schaeuble was cautious but firm. “The issue of reparations has been dealt with everywhere in Europe,” he said. “The legal issues have been settled. Everyone knows this, all Greek governments knew this and that’s why there was never an issue,” he said.
Earlier in the day, President Karolos Papoulias had received the leftist SYRIZA leader Alexis Tsipras for talks that focused on Greece’s unresolved claim for war reparations from Germany.