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Schäuble: Greece will not meet IMF repayment

June 29, 2015

Finance Minister Wolfgang Schäuble has told German public television that Greece will not meet its June repayment to the International Monetary Fund, which is due on Tuesday. He said Germany remained "prepared to help."

Brüssel Eurogruppe Wolfgang Schäuble
Image: picture-alliance/dpa/O. Hoslet

On Monday, German Finance Minister Wolfgang Schäuble told ARD television that Greece would not make a June 30 payment worth 1.6 billion euros ($1.8 billion) to the International Monetary Fund. The IMF, based in Washington, DC, had no immediate comment.

"Greece has announced that it will not pay the IMF, so that eliminates any future payments from the IMF," Schäuble told the news show "Brennpunkt" (Focus), referring to loans the institution might have made to Athens later. "This government has destroyed all confidence," Schäuble said of the Syriza regime, which took power in January on a platform of ending a half decade of harsh austerity measures imposed by international creditors encouraged most vocally by Germany.

Schäuble called Greece's performance in the weekend's credit negotiations, which ultimately failed, "unbelievable." He stopped just short of criticizing the decision to put any accord before Greek voters.

"This is a Greek matter," Schäuble told ARD on Monday. "Now they want to hold this referendum, and if, after the referendum, Greece asks, 'Could we talk about it?', we are prepared to, but we will start from the beginning," he added, noting that Greece had already received two credit extensions under the current program.

Schäuble also said that if Greek voters did not approve a plan agreed to with international creditors it would create new uncertainties. "How can we trust that the government will really do something?" he said the eurozone finance ministers had asked their Greek counterpart, Yanis Varoufakis, on Saturday.

Schäuble said that whatever happened the euro would remain intact - perhaps in an effort to assuage his boss and fellow austerity advocate, German Chancellor Angela Merkel, who had said that "if the euro fails, Europe fails."

"Greece was always a unique case," Schäuble told ARD. "On Saturday, we said with great clarity and decisiveness - and we stand by it - that we will do everything to keep the euro stable," he said of the meeting of finance ministers. "Through these incomprehensible and difficult-to-finish negotiations ... the euro will not be destabilized," he added.

Markets had their vote on Monday, tumbling under fears of a default.

'Prepared to help'

On Sunday, Tsipras had urged Greeks to keep calm after his government imposed capital controls and said it would keep banks closed until next Sunday's referendum. Since Friday night alone, over 1.3 billion euros have been withdrawn from the Greek banking system, according to the head of the bank workers' union Stavros Koukos.

Cash withdrawals from automated teller machines were capped at 60 euros a day for Greeks. Tourists, the pita and hummus of Greece's economy, were told the ATM withdrawal limit did not apply to people using foreign credit and debit cards. The government has also made public transport in the Athens region, where 40 percent of Greece's population lives, free while the banks remains closed.

Should Greece default on its payment to the IMF as Schäuble predicts, the country could lose the euro as its currency. All is not lost, though, the German finance minister told ARD on Monday.

"We remain prepared to help Greece and the Greek people," Schäuble said.

Fresh ideas would be welcomed in Athens, Schäuble's Greek counterpart told a German newspaper. The government remained "open to new proposals by the institutions," the mass-circulation daily Bild quoted Varoufakis as saying in an interview published Sunday.

mkg/jr (Reuters, AFP, dpa, AP)

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