German finance minister indicates Greek default may be averted

Eurozone finance ministers meet in Brussels on Monday to discuss the bail out loan to Greece. Reports indicate that Germany may have bowed to global pressure, as Wolfgang Sch?uble said the second aid package may be approved.

German Finance Minister Wolfgang Sch?uble has put intense pressure on Greece during the last week, even going so far as to insult the country, in the opinion of Greek President Karolos Papoulias. As doubts were expressed as to the wisdom of proceeding with the bail out loan necessary to stave off a Greek disorderly default in March, with Sch?uble referring to Greece as a bottomless pit, the stage was set for the Toika to abandon its plans: indeed an alternative plan was leaked which indicated Germany favored a Greek default, with the date of March 23 set as D day. An alternative scene was set to abandon Greece and transfer the intended bail out funds into rescue packages for other struggling EU nations, Spain, Portugal, Italy and Ireland. As eurozone finance ministers are scheduled to meet in Brussels on Monday to discuss the situation, it appears that the message emanating from Germany has mellowed. The Telegraph reported Sch?uble said Greece was on "the right path" as he said "If Greece can implement all the necessary promises by the end of February and clear up any other open questions, the second aid package can be approved." Ekathimerini reported that the German message was reiterated by Austrian Finance Minister Maria Fekter who appeared to approve the loan being extended as she said "We are not going to abandon Greece" adding ?I don?t think there is a majority to go a different way because it would be enormously arduous and cost lots and lots of money.? More tellingly was a statement by an unnamed eurozone official who admitted that no member state wants to be ?responsible for pulling the plug on the deal at this late stage.? A Telegraph commentator aptly summed up the situation when he wrote "We are not going to abandon Greece's creditors particularly German & French Banks." If the loan is forthcoming it will most likely be paid into a separate escrow account to service interest payments on debt, as German has pushed for, leaving Greece to meet any state spending needs through further austerity cut backs or increased production.

Source: http://www.digitaljournal.com/article/319905

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