Report: Merkel Ally Says No More Concessions On Greek Bailout Terms

By admin on August 19, 2012

Angela merkel

On Friday reports emerged that German chancellor Angela Merkel was preparing to ease concessions on Greek bailout terms.

But a senior ally of Merkel, Volker Kauder, head of Merkel’s conservative bloc has told Der Spiegel that Greece cannot be offered any more concessions on the bailout. From the AP:

“The Greeks must stick to what they agreed to,” Volker Kauder, the parliamentary leader of Merkel’s conservative bloc, was quoted as telling the weekly Der Spiegel. “There is no more latitude, either on the timeframe or the matter itself — because that would again be a breach of agreements. It is just that which led to this crisis.”

Asked whether he could imagine a third rescue package for Greece, Kauder replied that officials will have to wait for the international debt inspectors’ report — “but I see little chance in the (governing) coalition for a third aid package.”

Greek prime minister Antonis Samaras is traveling to Berlin next week to ease bailout conditions for Athens and is specifically looking for a two-year extension of an austerity plan that was put in place by the troika –ECB, IMF, European Commission, according to Financial Times (via Der Spiegel). Samaras is also going to present the plan to French president Francois Hollande.

Nomura’s senior political analyst Alastair Newton writes that with German general elections approaching in 2013 and increasing opposition to any more liabilities taken on by he German taxpayer Merkel’s job is getting harder.

Main opposition SPD and the Greens are ” increasingly prone to opposing for the sake of opposition, ie to try to weaken Ms Merkel”, according to Newton.

He adds that Merkel and finance minister Wolfgang Schauble would likely oppose “very firmly indeed against any further financial aid for Greece, to the point of (passively?) encouraging a ‘Grexit’, not least to try to exploit it and its consequences to bolster domestic (and wider eurozone) support for the Merkel blueprint”.

Late yesterday, Schauble denied that there would be a new bailout for Greece. For now all eyes are on Samaras’ visit and the troika report on the progress Greece has made in implement crucial reforms in exchange for its bailout.