January 29, 2012
Germany's cautious, measured handling of the euro-zone debt crisis is coming under renewed fire from critics in Europe and the U.S. who say Berlin needs to take bolder, more decisive action.
But German Finance Minister Wolfgang Schäuble says "steady policies" are more likely to restore confidence in the euro zone than big bazookas.
He also delivers a warning to Greece that it needs to improve its implementation of fiscal and economic overhauls if it wants to get a new bailout package.
WSJ reporters Marcus Walker, William Boston and Andreas Kissler spoke with Mr. Schäuble in his Berlin office.
WSJ: Some say the most acute phase of the euro crisis is over and chronic problems remain, but the extreme danger is no longer there. What's your view?
Mr. Schäuble: We can see some signs that the path we've taken is successful, but the critical phase isn't behind us. Greece is in a very critical, very difficult phase. The uncertainties are still large, so it would be too early to sound the all-clear.
WSJ: Do you have to make a fundamental decision on Greece in coming weeks? Either to lend and risk a lot more money until 2020—or to allow a default?
Mr. Schäuble: Greece needs to decide. The problems in Greece can't be overcome without strong fiscal and structural adjustments. Pushing such changes through in a democratic system isn't easy.
The Europeans are prepared to support Greece on this path with everything that's needed. But we can't substitute for Greece implementing these measures. Greece needs far more time for this than was assumed two years ago.
Unless Greece implements the necessary decisions and doesn't just announce them, it can't be done. Without this, there's no amount of money that can solve the problem.
Perhaps we and our partners must look into ways to assist Greece in this difficult task in an even closer manner.
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