News Column

Merkel Rebuffs IMF Over Extra Time for Greece Reforms

Oct. 12, 2012

Marco Mierke, Andre Stahl, Helen Livingstone, Andrew McCathie

The Acropolis of Athens.
The Acropolis of Athens.

German Chancellor Angela Merkel rebuffed Friday a call by the International Monetary Fund to give cash-strapped Greece more time to clean up its state finances.

"We have agreed on a procedure that makes sense and to which we will adhere to," Merkel spokesman Steffen Seibert told a regular press briefing in Berlin.

The comments from Merkel came after Germany's finance minister, Wolfgang Schaeuble, clashed with IMF head Christine Lagarde at the IMF annual meeting in Tokyo.

Lagarde said Athens could require two more years to get its budget under control.

But said Seibert: "We are working on the implementation of the present on-going program and within the timeframe, that this program provides for."

Seibert went on to say to that Germany was waiting for the group of experts representing Greece's international lenders to report on Athens' progress in introducing economic reforms. "That is what in the end counts for us," he said.

"We shouldn't speculate" about such a demand until a report by Greece's creditors, the "troika" of the IMF, the European Commission and the European Central Bank is released, Schaeuble said in Toyko.

The German finance minister was taking part in a podium discussion with Lagarde.

The IMF chief warned that because of lack of growth, market pressures and austerity measures already taken, "a little bit more time" was necessary.

Schaeuble said that a change in the conditions of Greece's aid payments would confuse markets and lead to a lack of trust in politics. Greece had lost a lot of time by holding two elections and should contribute to rebuilding trust, he added.

Lagarde caused controversy on Thursday when she said that Greece needed two years to get its budget in order, exactly the period which Greek Prime Minister Antonis Samaras has pleaded for recently in European capitals.

"Greece needs more time and I have indicated to the euro partners that an additional two years would be very helpful and reasonable for Greece to actually meet its objectives," she told broadcaster CNN.

She also argued that "when many countries at the same time adopt the same austerity measures it creates a bigger deeper impact on growth."

"What we have advocated for some of those countries is, go a little bit more slowly ... secondly don't be focused on a number, a nominal target. Make sure you implement the measure that will take you to the number at some stage."

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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