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German Finance Minister: Nobody expects deal with Greece in April

schauble 2048756cGerman Finance Minister Wolfgang Schäuble said in an interview with Bloomberg TV yesterday that “nobody” expects a deal to release funds to Greece at the meeting of Eurozone finance ministers on 24 April.

He suggested that a debt restructuring is not on the agenda, and may not be for a decade. Schäuble also dismissed a report from Die Zeit that Germany was preparing plans for Greece to default but stay inside the Eurozone, though he admitted if they had such plans he would “definitely not talk about it.” However, the President of the CDU Economic Council, Kurt Lauk, told Bild on Thursday, “The Eurozone urgently needs an open discussion over its plan B for Greece – be it a Grexit, the introduction of a parallel currency, or another way.” Speaking this morning, Schäuble said he agreed that the “current construction of the Eurozone is unsustainable.”

Meanwhile, State Minister Alekos Flambouraris, a close aide to the Greek Prime Minister Alexis Tsipras, said, “We may consider the possibility of holding a referendum if the talks reach an impasse…In decisions of historic importance, it’s not a bad thing to consult the Greek people.” New Democracy spokesman Costas Karagounis responded saying, “If they move forward with such an idea, they turn this impasse into a tragedy.”

Separately, data released yesterday showed that Greece’s budget deficit for 2014 was 3.5%, compared to a government forecast of 1.3% and an original target of 0.8%. The primary surplus came in at 0.4%, well below a target of 1.5%, meaning Greece’s fiscal position may be even worse than originally thought. Rating agency Standard and Poor’s downgraded Greece yesterday and warned of an increased chance of default. In its explanation of the decision it did say that a missed payment to an official creditor “would not constitute a trigger” to lower Greece’s rating to ‘selective default’. Open Europe’s Raoul Ruparel appeared on the BBC Radio 4 Today Programme discussing Greece and arguing that without a deal in the next few weeks, the Greek government will have to choose between paying creditors or paying wages and pensions.

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