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Schäubles Plan: Losses Due to the Euro Rescue Not Until after the Election

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Schäubles Plan: Losses Due to the Euro Rescue Not Until after the Election

Originally appeared at DWN, translated by Karin exclusively for SouthFront

The federal government wants to try to address the losses for German taxpayers, because of the euro bailout in Greece, not until after the election. At that time there should be no more talks about the debt relief. To avoid formal losses, the repayment should be deferred to a very far-off date in the future.

Federal Finance Minister Wolfgang Schäuble wants to postpone debt relief for Greece in 2018 and thus avoid a parliament’s decision before the election. The “Handelsblatt” is reporting about this based on an as classified confidential letter to the Budget Committee. Therein Schäubles department signaled a willingness to bring Greece’s debt load to a sustainable level if necessary. “These measures are subject to the full implementation of the program in 2018,” the newspaper quoted from the paper. With debt relief by the end of this aid program it therefore would not be a change in the credit program, which would have to be approved by the Bundestag.

The trick is to label the maneuver as tax cuts; the federal government can then represent losses for German taxpayers as nonexistent after the parliamentary elections. Even if a debt repayment, which is currently almost completely at the European taxpayer, is never to be expected, the federal government can give the impression that it had resolved the problem.

In this context the terminology is important: If possible no one should speak about a debt cut- even so a postponement de facto amounts to the same. The whole procedure lies within the ESM (European Stability Mechanism), in which Schäuble is sitting at the Board of Governors. The bodies of the ESM are completely immune and not obliged to provide information to anyone. Taxpayers’ money was transferred to the ESM, and the institution has no accountability towards the taxpayers as to how it is used.

The International Monetary Fund (IMF) suggests longer repayment periods. The fund also called for “very low interest rates” for Athens. Following discussions with the European partners, the fund had come to the conclusion that Greece’s debt sustainability could be restored, said IMF spokesman Gerry Rice at a conference on Thursday. A debt cut would not be necessary, however, one must meet the country significantly at the repayment terms. Finance ministers from the euro zone are expected to meet on May 24th to draw up a restructuring plan for Greece, which could ensure the participation of the IMF.

The fund insists that Greece will be relieved with its debt of over 300 billion euros. In return the IMF requires cutbacks of the pensions and the abolition of tax exemptions from Athens. The European Central Bank (ECB), European Commission and IMF had saved Greece from bankruptcy with three rescue packages of a total of several hundred billion euros. In return, however, the country had to undertake, among other things drastic social reforms, spending cuts and tax hikes.

The money, however did not benefit the Greek people, but was used to rescue the European banks that had exposed themselves in Greece to an extreme risk.

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