Existing regulations and terms attached to financial assistance granted are binding for the new Greek government just as for it predecessor. Athens must respect the contractual commitments entered into by the former government.
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Elections do not change Greece’s debt in any way. On these points the German government, the eurozone ministers of finance and the European Commission are in full agreement.
Jeroen Dijsselbloem, President of the Eurogroup, will be flying to Greece to meet the new Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis. He will be discussing with them the country’s further cooperation with the EU. It is up to the new government in Athens to make the next move.
Federal Finance Minister Wolfgang Schäuble has already pledged Germany’s cooperation. "We intend to cooperate with the new government, but the elections in no way change the rules and terms". If Greece requires aid under the new government it will receive this just as it did under previous governments. "We make no distinction," declared the Federal Finance Minister.
In economic terms, the country is on the right path, even if it is still a difficult path. Wolfgang Schäuble does not believe that any debt reduction will be required for Greece in the near future.
"The question does not arise at the moment," said Wolfgang Schäuble on Tuesday at the meeting of EU finance ministers in Brussels. The financing for Greece was designed as a long-term measure. International creditors are deferring interest, and the country will not be required to begin repayment until the next decade.
Greece has it harder than other countries, said Wolfgang Schäuble in an interview with the German broadcaster ZDF. "That is why from the outset I have called on the people in Germany to respect Greece, and the burden that the Greek people have had to bear." The Greeks had it far harder than us Germans. "But the root causes of Greece’s problems were never to be found outside the country – the causes were always inside Greece."
Wolfgang Schäuble rejected any suggestion that Germany or the EU were partially responsible for the desperate social situation in Greece. The Greek people are not suffering because of any decisions made in Berlin or Brussels but because of decades of incompetence on the part of the elite inside the country, he said to the European Parliament’s Committee on Economic and Monetary Affairs.
To prevent national bankruptcy Athens received 240 billion euros under two bailout programmes. In return it undertook to pursue austerity measures and implement reforms. The extension of the second programme will end at the end of February.
In principle, further help towards self-help will be forthcoming for Greece as it continues to pursue harsh reforms, said Wolfgang Schäuble. "If Greece decides to take a different path, however, things will be difficult," he said. The ministers of finance of the euro zone are relaxed, though, because "the threat of infection within the euro zone is low".
Bailout programme for Greece
Under the provisions of the first rescue package, Athens received 73 billion euros, with the eurozone states contributing 52.9 billion euros and the International Monetary Fund 20.1 billion euros. Germany contributed 15.17 billion euros.
The second bailout programme was worth a total of 163.7 billion euros. Greece has so far received 153.7 billion of this sum, from the European Financial Stability Facility (EFSF) and the International Monetary Fund (IMF). The lion’s share has been put up by the EFSF, which has contributed 144.6 billion euros.