'Without a New Beginning, Athens Is Lost'

Spiegel
February 10, 2012

The European Union is demanding even greater sacrifices from Greece, despite the deal reached by politicians in Athens on Thursday. Facing more painful cuts, Greek citizens are back on the streets as resentment boils over. German commentators say it's time to finally face the truth.

It was supposed to be a breakthrough. But the deal that was reached on Thursday by the Greek government received a lukewarm reception in Brussels. The Gordian knot of the Greek debt crisis remains as intractable as ever.

On Thursday, Greek party leaders had announced that, following weeks of talks and delays, they had finally agreed to accept the stark austerity conditions imposed on them by the troika of the European Commission, European Central Bank and International Monetary Fund. But German Finance Minister Wolfgang Schäuble reacted by saying that the news from Athens was still not enough to trigger the release of the second bailout package for Greece, worth €130 billion ($172 billion).

Similarly, no decisions were made at the five-and-a-half hour Euro Group meeting later on Thursday. On the contrary, Luxembourg Prime Minister Jean-Claude Juncker, the group's president, announced afterwards that the Euro Group would have to meet once again next Wednesday. Greece has until then to fulfill several remaining conditions, including finding a further €325 million in savings.

In addition to passing strict austerity measures, Greece needs to negotiate a debt relief agreement with private creditors worth €100 billion if it is to receive the EU/IMF aid package. If not, the country could default as early as next month, when €14.5 billion in Greek government bonds come due.

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