April 11, 2011
Germany warned that deficit-scarred Greece might need more financial relief, reviving European debt concerns just as Portugal seeks an 80 billion-euro ($116 billion) aid package.
German Finance Minister Wolfgang Schaeuble said it is unclear whether Greece, the root of the year-old debt crisis, will need another cut in its bailout rate or a further extension of repayment terms to return to fiscal health.
“We, also the Greek government and the Greek colleague, can’t say for good today whether that’s enough,” Schaeuble told reporters after an April 9 meeting of European finance officials in Godollo, Hungary. “Whether that is enough and how this continues will have to be monitored closely.”
Germany’s doubts conflicted with official assertions that Greece is on the right track, defying efforts to put an end to the crisis that threatened the survival of the euro, postwar Europe’s signature economic achievement. Last week’s increase in European Central Bank interest rates for the first time in almost three years throws a further cloud over weaker economies.
Bond investors are charging Greece 938 basis points more than Germany to borrow for 10 years. The spread for Ireland, the second country to obtain aid, is 577 basis points. Portugal, aiming for a relief plan by mid-May, pays an extra 518 basis points.
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