Schaeuble Shrugs Off Greek Vote Saying Euro Exit Is Best

Source: Bloomberg

German Finance Minister Wolfgang Schaeuble told Greece the only way it’ll get a debt reduction is to leave the euro and cast doubt on the country’s ability to even complete negotiations on a third bailout.

Schaeuble, who led the charge for Greece to take time out from the single currency region, said the Greek parliament’s vote to accept the austerity that is a precondition of further aid was a “step further forward.” Yet he reiterated his view that a temporary exit from the 19-nation euro region may be “the better way” since it would allow the debt forgiveness that is necessary yet banned under euro rules.

Given Greek financing needs, “we’ll see in the negotiations if there’s even a way to arrive at a program,” Schaeuble said in an interview on Deutschlandfunk radio on Thursday. “I don’t know, nobody knows at the moment how this is supposed to work without a haircut and everybody knows that a haircut is incompatible with euro membership.”

The broadside from the finance chief of Europe’s biggest economy underlines the hurdles that remain for Prime Minister Alexis Tsipras even after he had to rely on opposition votes to pass the pension curbs and state-asset sales required just to begin talks on aid of up to 86 billion euros ($94 billion).

Read more: http://www.bloomberg.com/news/articles/2015-07-16/schaeuble-shrugs-off-greek-vote-saying-euro-exit-is-best