As German Chancellor Angela Merkel was set to visit Athens on Oct. 9 to meet Prime Minister Antonis Samaras, German Finance Minister Wolfgang Schäeuble said Greece will get a delayed $38.8 billion loan installment that is the last due from a series of $152 billion in rescue monies even though the Greek government hasn’t finalized a package of $17.45 billion in spending cuts and tax hikes.
Schäuble discussed Greece’s situation in an interview with RBB-Inforadio where he said that reforms demanded by the Troika of the European Union-International Monetary Fund-European Central Bank are the only way out for Greece, although the austerity measures have worsened the country’s five-year recession.
Asked whether Merkel’s visit was an indicator the loan payment would be forthcoming, he said that’s up to the Troika but believed it would, but only if Greece adheres to austerity. Greece is also awaiting a second bailout of $173 billion that is on hold. He said that Greece must stop spending more than it produces and said anti-austerity politicians were irresponsible.
He said that the goal is for Greece to have a 120% debt-to-Gross Domestic Product (GDP) ratio by 2020, down from almost 180 percent now and regain access to markets instead of relying on welfare aid. He noted that reform programs are working in other countries, such as Ireland and Portugal.
The first bailout has largely backed, creating 24 percent unemployment, closing 68,000 businesses and shrinking the economy by 7 percent, but the Troika – backed by Merkel – is insisting on more. In the last five years, Greece’s GDP has contracted by 30 percent, figures seen usually in conditions of war, and many Greeks are suffering in the wake of pay cuts, tax hikes and slashed pensions.