Berlin urges Athens to implement reforms fully | News | DW | 04.09.2012
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Berlin urges Athens to implement reforms fully

Greek Finance Minister Yannis Stournaras has been told during a visit to Berlin by his German counterpart Wolfgang Schäuble that Greece must stay the course in implementing its fiscal reforms.

European, Greek and German flags fly outside the Chancellery in Berlin, August 24, 2012. The parliamentary leader of Angela Merkel's ruling conservatives said on Friday, hours ahead of the chancellor's meeting with Greek Prime Minister Antonis Samaras, that neither the time nor the content of Greece's rescue package can be renegotiated. REUTERS/Thomas Peter (GERMANY - Tags: POLITICS BUSINESS)

Deutschland Griechenland EU Flagge vor Kanzleramt in berlin

Schäuble hosted Stournaras on Tuesday in Berlin, where the two discussed Greece's progress in carrying out fiscal reforms that are conditions for the next installment of international bailout money.

"It is vital that Greece fulfils its promises completely," read a statement published on Germany's Finance Ministry website after their meeting.

Schäuble also said that Greece's compliance was currently being checked by experts of the troika group comprising the International Monetary Fund, the European Commission, and the European Central Bank.

The troika's report is expected in October, and would determine if Greece receives the next round of bailout money it needs to avoid default and even possibly an exit from the eurozone.

A study released in Greece on Tuesday, however, indicated that Greece's recession will drag on into 2014 if the country implements all the required cuts in spending.

"In the case where the 11.6 billion euros [in] agreed government spending cuts are implemented [over] a two-year period, we adopt the hypothesis that the 2012 recession will continue in 2013 and 2014," the Center of Planning and Economic Research (KEPE) said.

KEPE is Greece's largest economic research institute and operates under the supervision of the Ministry of Regional Development and Competiveness. The organization's study predicted an economic contraction in Greece of 2.5 percent in 2013 and of 1.5 percent in 2014.

In a scenario where the same cuts were applied over four years, KEPE predicted that Greece's economy would contract 1.8 percent in 2013 and not at all in 2014. Presenting two scenarios - for two years and four years - KEPE predicted that the Greek economy will return to moderate growth in 2015.

mz/ipj (afp, dpa)