March 29, 2024

European Leaders Escalate Tough Talk on Greece

Aid will only be paid “if Greece actually does what it agreed to do,” said Wolfgang Schäuble, the German finance minister, during an interview Thursday with Deutschlandfunk radio.

If Greece does not meet the conditions it agreed to, as assessed by monitors from the International Monetary Fund, European Central Bank and European Commission, then payments will stop, Mr. Schäuble said.

“Then Greece has to see how it gets access to financial markets without help from the euro zone,” he said. “That’s Greece’s problem.”

Mr. Schäuble pointed out, however, that there is no legal mechanism to expel a country from the euro zone.

His comments add to a chorus of sharper rhetoric toward Greece from its euro zone benefactors, as Athens struggles to find new measures to meet its deficit-reduction targets — a task made harder by a deeper-than-expected recession.

The prime minister of the Netherlands on Wednesday said that countries receiving aid should either cede control over their budgets or leave the euro zone.

“Countries which are not prepared to be placed under administratorship can choose to use the possibility to leave the euro zone,” the Dutch prime minister, Mark Rutte, said in a proposal sent to Parliament, Reuters reported.

The leaders are responding to political discontent at home. But the tougher rhetoric also represents a growing split between countries like Greece or Italy that are perceived as delinquent, and countries like the Netherlands, Finland or Germany who see themselves as more virtuous.

Many economists say that the ripple effects from Greece’s departure from the euro zone could be catastrophic for the world economy, but the possibility is no longer a taboo subject among politicians.

Horst Seehofer, leader of the Bavarian wing of Angela Merkel’s governing coalition in Germany, said in an interview in the newspaper Bild, published Wednesday, that he did not rule out Greece’s exit from the euro area.

Mr. Seehofer said he hoped that Greece’s austerity program would succeed. But he added, “there won’t be any help without a contribution from the indebted countries.”

Tensions among euro zone members have risen as the bill for rescuing Greece has increased, and as that country has had trouble keeping promises to cut spending and make its economy more efficient. Representatives of the I.M.F., E.C.B. and European Commission broke off a monitoring visit to Athens last week amid signs that Greece would miss its targets.

Meanwhile, public protests against austerity cuts and other measures designed to open up closed professions continue in Greece. Taxi drivers staged another 24-hour strike Thursday along with some doctors and dentists. Garbage collectors, teachers and tax office workers are expected to follow in the coming weeks.

Adding to the air of uncertainty over the crisis, Finland continues to negotiate with Germany and other euro zone countries on its demand to receive collateral as a condition for its share of the latest Greece rescue package.

Analysts have suggested that the agreement as it stands also might face difficulty in the Netherlands. The Cabinet has agreed that the package will not become policy without the consent of lawmakers, who will debate it at a meeting of the finance committee Wednesday, according to a parliamentary spokesman, David van der Houwen.

The coalition government, led by the Liberals with the Christian Democrats, relies on support from the extreme right-wing Party for Freedom, which opposes aid to Greece. That means the government might have to seek backing from the left-wing opposition in Parliament.

Article source: http://feeds.nytimes.com/click.phdo?i=a657e6219a478c2130a34e8b4635a61b