Friday, May 29, 2015

G-7 meeting in Dresden – Greece was not an issue – or does it? – Sü

  • At the meeting of the finance ministers of the seven largest industrialized countries was only briefly talked about the debt crisis in Greece. That says German Finance Minister Wolfgang Schaeuble
  • The US Treasury Secretary Jack Lew had a different impression: Greece had been constantly subject – albeit on the outskirts and not in the meetings

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Guido Bohsem , Dresden

In a previous life, in his time as CDU party chief, Wolfgang Schäuble has even accused the press to report on the wrong things. The media could not but proceed along the lines of, “no matter what the topic is, I write about June bugs”. At that time the party was plagued by the donations scandal and it came to the question of whether Schäuble and the entire party would survive the scandal politically.

At the meeting of the finance ministers of the seven leading industrial nations (G7) in Dresden, must have gone like it Schäuble. As host, he had set an ambitious agenda. It should not go to Greece but to the question of what reforms are necessary to bring the years to slow growth of the world economy back on track. Ministers should talk about how large international banks can build up enough capital to withstand possible losses due to crisis-like situations. It was about a code of conduct for investment bankers and a lot more

Dresden prelude to the G7 finance ministers meeting

On Thursday morning in Dresden, the G7 finance ministers have started work at their three-day meeting. They discuss growth, investment, financial markets and the Ukraine.

(Video: Reuters )

About Greece, as emphasized Schäuble , you had only then talk in a meeting at the very end and only a few minutes. Contrary to expectations of some media you’ve taken care of the agenda and not to Greece. In any case, the issue was not a matter of the G 7, but a matter for the so-called institutions, ie the euro area countries, the European Central Bank (ECB) and the International Monetary Fund (IMF). That does not mean that one regards the subject relaxed. The severity of the problem one is fully aware, even if you had to deal here in Dresden quite relaxed with it.

Schäuble’s American counterpart Jack Lew had obviously a different impression. Yes, he said, Greece have played only a very minor role in the meetings themselves. In the discussions on the edge but it was a constant theme of the ministers and central bank chiefs of the country.

US Treasury does not believe an early resolution

Lew warned the Europeans above all, the possible effects of an exit of Greece from the monetary union, a Grexits to underestimate. “It can not be in the interest of the global economy, when it comes to a crisis.” There is great uncertainty about whether the effects of Grexits could be limiting. Lew called the euro countries, the IMF and the ECB on to great flexibility in dealing with the Greeks. He urged to exercise more: “Greece must make tough decisions,” he said. Come back at a Grexit, the country would have the most to suffer.

He did not think that there would be a solution to the problem is already on 5 June, Lew said. On this day the Greeks will have to pay the next installment from the IMF. Nevertheless, the Minister of Finance, the financial backers and the Greeks moving toward a deadline, to a final deadline. This can be quite advantageous, it was up but in human nature to make difficult and tough decisions only under the impression of an absolute deadline.

Better talk climate, but no approach

On effort is not lacking. Greek Prime Minister Alexis Tsipras phoned more than an hour with German Chancellor Angela Merkel and French President Francois Hollande, to find a solution to the problem. Merkel and Hollande had offered to help find a solution to the conflict. On Monday, Hollande and Merkel meet with the President of the European Commission Jean-Claude Juncker. Again, it goes officially to a deepening of economic and monetary union. In fact, the Greek problem is likely but also overlay this meeting.

On the merits, there is no approximation. According to high-level participants in the negotiations, the Greeks have so far been no concrete commitments to reform. Although the conversation climate have improved considerably since the Euro Group meeting in Riga. But that did not meant that you had progressed in the matter. The institutions urged in particular that the Greeks would make reforms to their pension systems. This had to have a similar level of performance as that of France or Germany, but no more than the contributions necessary. The date desired goal of a permanent primary surplus – that is the budget balance before interest payments – of 4 to 4.5 percent will no longer be possible to comply. This year the country will instead have a deficit.

Schäuble warned the completion of the Dresden meeting all parties to accept their responsibility for the future of the euro zone and the stability of the global economy to be aware of. To be continued.

G-7 meeting ” Grexit is possible “

IMF chief Lagarde finds strong words for Greece. The exit of Greece from the euro zone would be possible. If Europeans want to avoid a national bankruptcy, they would even take precautions.


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