Greece will never pay us back: German economist
Debt-stricken Greece is unlikely ever to be in a position to pay back loans from Germany currently under consideration to help its solve its problems, an influential German economist said Wednesday.
Asked on MDR radio if Berlin would ever get its money back, Hans-Werner Sinn, head of the Ifo institute and one of the top economic advisors to the government, said: "To tell you the truth, no."
Greece "will not be in a position to carry out the necessary budgetary rigour" and will eventually have "to ask for Germany to waive the debt," he said.
He warned that bailing out Greece could set a precedent for other euro area countries labouring under high debt and public deficits.
"It would be understandable if the Italians or the Spanish put pressure on us to pay up now because it is an important precedent for them," said Sinn.
Sinn's comments came ahead of a flurry of meetings in Germany about whether to contribute to a 30-billion-euro (40-billion-dollar) eurozone aid package, which is deeply unpopular in the country.
Chancellor Angela Merkel will hold talks with, among others, Dominique Strauss-Kahn, the head of the International Monetary Fund, which would also stump up billions.
Strauss-Kahn and European Central Bank chief, Jean-Claude Trichet, will also meet senior members of the German parliament to discuss the crisis in Greece, whose 10-year bond yield hit a record-hit 10 percent earlier Wednesday as the markets bet Athens will be forced to default on its debt.
© 2010 AFP