Germany warns Greece on austerity measures

3rd May 2010, Comments 0 comments

Greece must implement its new austerity programme "quickly" and "to the letter," the economy minister of European powerhouse Germany, Rainer Bruederle, warned on Sunday.

"Since Germany and the German people are acting for the stability of the eurozone, I expect now from the Greek government that it implements the programme of cuts that it has presented quickly, decisively and in a credible manner to the letter," Bruederle said in a statement.

Greece announced earlier Sunday that it has struck a deal with the European Union and the International Monetary Fund for an emergency bailout to prevent it defaulting on its debt, in return for deep spending cuts.

EU-IMF loans to debt-laden Greece are set to total around 110 billion euros (146 billion dollars) over three years, according to a draft deal to be endorsed by eurozone finance ministers on Sunday in Brussels, a diplomatic source said.

Berlin has come under pressure for dragging its feet over Greece, but with Germany set to be the biggest contributor among European countries to a bailout, voters are uneasy and Chancellor Angela Merkel has had to tread carefully.

"What is also clear is that a case like this can never happen again. We must create rules in Europe that make it possible to act against states' debt crises before they happen," Bruederle added.

He said this included an "early warning system", looking in more detail at countries' finances, sanctions for those that fall behind and a mechanism to deal with future crises.

Merkel's government hopes that new legislation needed before any loans can be disbursed will become law by Friday. Her cabinet was due to prepare a bill on Monday which will get its first reading in parliament on Wednesday.

© 2010 AFP

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