German Minister of Finance Wolfgang Schaeuble warned Greece that any new government must respect commitments made by its predecessor, as the country moved closer to early elections that EU officials fear could be won by a radical leftist party.
Schaeuble spoke after German lawmakers last week backed plans to give Greece a two-month loan extension while international creditors finish an audit to determine the release of its next 7 billion euros (US$8.54 billion).
“We will continue to help Greece along the path of difficult reforms,” Schaeuble said in an interview with German tabloid Bild published yesterday.
Photo: Reuters
However, if Greece “decides to take another path, that will be more difficult,” he added.
Greece moved a step closer on Tuesday to early elections that could undermine its international bailout and rekindle the eurozone crisis, after the nation’s lawmakers failed for a second time to elect a president.
The Greek government’s candidate, EU Environment Commissioner Stavros Dimas, fell 32 votes short of the required 200 votes, meaning a third and final vote is set to be held tomorrow.
EU and IMF officials fear an early election would be won by radical leftist party SYRIZA and could undo many of Greece’s ongoing fiscal reforms. SYRIZA, which wants to end a four-year austerity drive and renegotiate Greece’s bailout, holds a steady lead in opinion polls.
Greece’s dire finances nearly destroyed the euro in 2012, and despite bailouts worth 240 billion euros and most of the debt held by private investors being wiped out, the economy has only recently begun to recover after six years of contractions.
The reforms required by the EU and IMF have improved the Greek government’s finances, but have taken a terrible toll on the public, as unemployment soared above 27 percent and many people have had wages and benefits cut.
Schaeuble said Greece had made “huge progress” in recent years, but issued a sharp warning in the face of the growing challenge SYRIZA is posing to the Athens government.
“New elections would change nothing with regard to Greek debt. Every new government must respect the agreements made by their predecessors,” he said.
Greek Prime Minister Antonis Samaras warned this week that early general elections, which could be held as soon as Jan. 25, constituted a “national danger” that must be avoided.
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