ECONOMY

Schaeuble ‘agrees to disagree’ in first talks with Varoufakis

The first direct talks between Greece and Germany since a new anti-bailout government took power in Athens last week yielded no agreement on how to narrow their differences.

German Finance Minister Wolfgang Schaeuble said he and his Greek counterpart, Yanis Varoufakis, “agreed to disagree” in their Berlin meeting.

Their encounter came hours after Greece lost a critical funding artery when the ECB restricted loans to its financial system. That raised pressure on the 10-day-old government to yield to German-led austerity demands to stay in the euro zone.

The Greek government “remains unwavering in the goals of its social salvation program, approved by the vote of the Greek people,” according to a Finance Ministry statement issued overnight. It’s aim is “coming up with a European policy that will definitively put an end to the now self-perpetuating crisis of the Greek social economy.”

The next move is up to Prime Minister Alexis Tsipras, who swept to power promising to reverse five years of spending cuts that accompanied 240 billion euros ($272 billion) of bailout loans. While he’s retreated from demands for a debt writedown, he’s so far sticking to promises to increase pensions and wages that breach the conditions for financial aid.

[Bloomberg]