In a special session, Committee on Budgets of German Bundestag approved last tranche of credit for indebted Greece. It covers approximately 15 billion euros. Indeed, euro finance ministers and Governing board of ESM bailout fund had already approved last billion aid weeks ago and Bundestag had already agreed, but release was still in Bundestag committee. Finance Minister Olaf Scholz (SPD) campaigned with members for approval of last aid. AfD and FDP had resisted decision.
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The background of delayed decision was a dispute with government in Ans. It did not want to raise VAT on five islands of Ostägäis to 24 percent as announced, but leave at least 17 percent by end of year. The Greek government justified this with increased costs due to incoming refugees. A compromise now foresees increasing value added tax at end of year. The tax losses are estimated at 28 million euros. Instead, Greek government wants to save on defense budget.
In addition, Greece was promised to receive hundreds of millions of euros in interest income made by Germany if government complied with its reform pledges. The Committee must once again agree on this. Germany has earned a total of at least 2.9 billion euros in interest gains since 2010.
Reforms are reviewed on a regular basis
The third Greece programme covers up to 86 billion euros. “Greece will also have to carry out a review by funders,” said budget spokesman of CDU/CSU group, Eckhardt Rehberg. The institutions would monitor compliance of reform commitments in framework of post-programme review on a quarterly basis.
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The SPD politician Achim Post said that Greece has made enormous efforts in recent years to meet reform requirements. With completion of aid programme, country could again stand on its own feet. The successful conclusion of programme at same time shows that “Europe is able to solve problems toger when reason and solidarity prevail – and not populist sham solutions”.
Criticism came from AfD. The party basically rejects ESM bailout, “since it is economically ineffective, patronizing against Greece, and is also unconstitutional,” said Peter Boehringer (AfD), Chairman of Committee on Budgets. “The Greek economy can’t even be healthy within euro,” Boehringer said. The FDP budget politician Otto Fricke also criticized release. He doubts that Greece can soon be back on its own feet financially.
