German Finance Minister Wolfgang Schaeuble said on Tuesday Greece will not be able to receive another tranche of international aid if the delayed "troika" report from the IMF, ECB and European Commission is not positive. The rules state clearly and "with no room for manoeuvre" that the International Monetary Fund, European Central Bank and European Commission's report on compliance with reform targets must be positive for further aid to be released, he said.
"The troika mission must be resumed and it must come to a positive conclusion, otherwise the next tranche for Greece will not be paid out," Schaeuble told a budget debate in the German parliament. "Those are the rules." Greece's talks with its international lenders broke off last Friday after disagreement on why Athens has fallen behind schedule in cutting its deficit target and what measures it should take to catch up. The EU and IMF granted Greece a 110 billion euro bailout last year, followed by a second aid package for 109 billion euros agreed in July this year with private creditor participation. The minister reiterated Berlin's rejection of proposals for a joint eurozone bond, which he said merely shared around the sovereign risk by lowering interest rates for heavily-indebted countries - who would have no incentive for fiscal reforms.
"That's why I state very clearly that without institutional changes, introducing euro bonds would be a perfect case of misconceived solidarity," he told opposition benches who favour such a measure. "The euro would lose its credibility as a stable currency."
The minister also took issue with the IMF's calculation that European banks need 200 billion euros' recapitalisation, saying it had to be discussed by G7 finance ministers meeting at the end of this week in Marseilles. European bankers and policymakers reject the IMF's estimate of the capital shortfall that their banks could face, with EU stress tests in July suggesting the region's banks needed to raise just 2.5 billion euros.
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