German Finance Minister Wolfgang Schaeuble said it is not in Greek interests to question the involvement of the IMF in its bailout program. German Finance Minister Wolfgang Schaeuble slammed Greek Prime Minister Alexis Tsipras on Tuesday, warning that it is not in Greece’s interests to question the involvement of the International Monetary Fund in its debt-restructuring program.
Full IMF participation is linked to the first review of Greece’s progress in meeting its fiscal commitments as part of the US$94 billion bailout loan it obtained last August.
The terms of the latest bailout payment include the adoption of a ‘debt brake,’ forcing across-the-board spending cuts if fiscal targets are jeopardized. The objective is to convert the primary deficit in the first half of 2015 into a surplus of 3.5 percent of GDP by 2018. These measures are the framework for the third bailout negotiation.
During a TV interview Monday night, Tsipras expressed reservations regarding IMF participation, which is demanding that his government adopt harsh fiscal austerity measures such as pension cuts and a reduction in public spending.
“The Fund must decide if it wants a compromise, if it will remain a part of the program,” said Tsipras. “If it does not want to, it should come out publicly and say so.”
In response to Tsipras’ comments, Schaeuble suggested that the Greek leader is having second thoughts about adopting some of the measures demanded by Greece’s lenders.
“They should focus their attention on doing what they have to do,” he said. “As always, they are behind schedule. Maybe questioning the agreement is necessary for domestic reasons; he has a slim majority I have noticed. This may be the easy route but it is not in Greece’s interests.”
Despite Schaeuble’s accusations, Greek lawmakers have already approved the country’s budget for 2016, which complies with the commitments of the third bailout program imposed by the country’s creditors. The budget for 2016 will adopt several creditor demands such as tax hikes, a reduction in government spending and pension cuts.
According to a 2015 report released by the Debt Truth Committee, the third bailout program and subsequent budget is likely to see an “increase (in) poverty, class polarization and social exclusion,” negatively impacting “working class rights” and violating the “fundamental human rights of the Greek people.”
Labeling it “a difficult exercise,” the budget has heaped further pressure on Tsipras, whose Syriza party was elected for its economically leftist proposals.
According to a recent poll carried out by Skai television, more then 50 percent of the Greek population are opposed to the austerity measures required by the bailout program. The same survey found that 73.5 percent doubt that Greece will get out of the bailout commitments by the end of the government’s four-year term.