German Chancellor Angela Merkel indicated on Friday that the repercussions of Greece’s bailouts would not end after the country officially exits the program on August 20.
“It will be an important day in August when this program ends but the ongoing effects of this program won’t end on that day,” Merkel told a news conference in Berlin, essentially undercutting the government’s rhetoric about a “clean exit” from austerity.
The chancellor also defended the high primary surplus targets Greece has been set for the coming years, saying they were not a sign of lacking trust in the country but a necessary measure to reduce the level of debt. “It’s a good compromise,” she said.
Merkel also rejected speculation that Berlin had struck a deal with Athens to accept migrant returns in exchange for a postponement to a scheduled increase in value-added tax for five eastern Aegean islands hit by the refugee crisis.
She said she never discussed the matter with Greek Prime Minister Alexis Tsipras. “We do not link those two issues,” Merkel said. “It would not be good for either of us.”