Germany Rejects Greek Cuts

Greece pushes back against demand for more budget reductions.

A leader of Greece’s governing coalition pushed back against German demands for deeper budget cuts to get the bailout needed to prevent a financial collapse.

In Athens, unions struck for the second time this week and police used tear gas to counter protesters. George Karatzaferis, who heads one of the three parties supporting interim Prime Minister Lucas Papademos, said he wouldn’t support austerity measures worked out for a rescue. He spoke hours after German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece was missing deficit targets.

Greece “must get this deal agreed really within the next few days to enable them sufficient time and have the new bailout money disbursed before that bond is due,” Tony Stringer, Fitch’s managing director of global sovereigns, said in an interview in Singapore. “If they don’t manage to achieve that, then it could be in the realm of a disorderly default.”

Europe’s hardline stance follows more than two years in which Greece failed to carry through promised reforms to tackle its uncompetitive economy and meet the terms for aid. Greece blamed its shortcomings on a deepening recession now set to worsen with reports yesterday showing unemployment jumping to 20.9 percent in November and industrial production declining.

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