BERLIN (Reuters) – German Finance Minister Wolfgang Schaeuble does not expect a final agreement on a cash-for-reform deal between Athens and its creditors at Monday’s Eurogroup meeting, he told a newspaper, warning against a Greek default.
“I don’t see that everything will be solved by then,” Schaeuble told Frankfurter Allgemeine Sonntagszeitung in an interview published on Saturday.
The minister, a close ally of Chancellor Angela Merkel, said Athens’ financial situation did not seem very good and he did not know if the Greek government had an exact overview of its finances.
“Such processes also have irrational elements,” Schaeuble warned, adding: “Experiences from the rest of the world have shown a country can suddenly slide into insolvency.”
Greece expects its economy to grow at little more than a third of the pace it originally targeted in its 2015 budget, a finance ministry plan suggested on Saturday. The government has been ordering state entities to park idle cash at the central bank to keep its finances liquid.
When asked whether the German government was prepared for a Greek default, Schaeuble said: “There are questions that a responsible politician must not answer.”
However, he reiterated that Germany would do everything to keep Greece in the euro zone “under responsible conditions” and added: “It may not founder because of us.”
Greece’s left-led government was elected earlier this year on promises to end austerity policies agreed by a previous government with the European Union and International Monetary Fund, heightening the risk that it will default on debt repayments and be forced out of the euro zone.
As so often since the euro zone’s debt crisis began in 2010, much hinges on Germany, Greece’s biggest sovereign creditor.
Greek Prime Minister Alexis Tsipras has spoken by telephone to Merkel several times this week, officials said, without giving further details.
A source briefed on German government thinking said Merkel was willing to take a deal to continue financial support for Greece to an increasingly skeptical parliament provided Tsipras made serious commitments on reform.
(Reporting by Michael Nienaber; Editing by Janet Lawrence and Ruth Pitchford)
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