Schäuble: ‘There Will Be No Further Haircuts’

German Finance Minister, Wolfgang Schäuble seemed rather positive about “providing limited aid” to Greece, stating that this will not include a new “haircut” to the already existing debt. “What we always said was that if Greece were to need further, limited, financial assistance at the end of this year when the current aid package expires, then we are prepared to do this, provided that Greece has met its obligations by then. Greece is on the right path,” said Schäuble during an interview. However, he stressed the fact that this new aid package would not include a new “haircut” of the debt. “In the same way that we had a haircut of 53.5 percent for private investors holding Greek government debt, there will be no such haircut, we said then it was a one-off and it will not be repeated.” Furthermore, Schaeuble expressed his opinion that there should not be any anxiety over whether the euro will remain stable, and estimated that there is no more risk of the financial crisis spreading to Europe. Finally, the German minister warned that the central banks of emerging economies must proceed with caution. “We have used monetary policy as a tool to gain some time. But this time it should not be used to avoid solving problems,” he concluded.

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