Germany has 'right' to block Greek loans: EU

25th April 2010, Comments 0 comments

Germany will be within its rights if it chooses to block a deal for euro currency partners to bail out debt-stricken Greece alongside the IMF, the European Commission said on Sunday.

Commission officials, alongside the European Central Bank and the International Monetary Fund, are currently assessing Greek plans to restructure its budget and economy over the next three years in exchange for loans.

However, Germany's finance minister, Wolfgang Schaueble, told the mass-market Bild newspaper on Sunday that Berlin could reject the call from Athens for 30 billion euros (41 billion dollars) in loans from its 15 single currency partners.

"The fact that neither the European Union nor the German government has taken a decision means: it could be positive or negative," Schaueble was quoted as saying.

"It depends alone on whether Greece in the coming years continues along the saving course on which it has embarked."

The European Union executive is due to issue its opinion on Greek measures within "a matter of days," said Amadeu Altafaj Tardio, spokesman for the EU's economic and monetary affairs commissioner Olli Rehn.

But he underlined: "Any member state can block. It is their right if they still think that it's not yet needed and the financial stability of the euro area is not at stake."

While that indicated a growing concern that German Chancellor Angela Merkel could torpedo hopes of an early release of the money, a senior EU official suggested renewed intransigence in Berlin was more to do with vital elections on May 9.

"The election campaign can't justify anything," the official insisted. "They will have to explain their position later to their citizens if the euro area as a whole is destabilised.

"This is not and has never been only about Greece," he stressed.

Speaking in Washington, IMF managing director Dominique Strauss-Kahn said that "the IMF, the European partners, and everyone involved in the financing effort recognises the need for speed.

"I am confident that we will conclude discussions in time to meet Greece's needs," he underlined after meeting here with Greek Finance Minister George Papaconstantinou.

© 2010 AFP

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