UPDATE 1-Germany tries to calm storm over minister's Greek aid remarks

Wed Aug 21, 2013 9:49am EDT

* German government maintains Schaeuble said nothing new

* Greens demand that minister clarify remarks in parliament

* Merkel says too early to say how much new money Greece may need

By Gernot Heller

BERLIN, Aug 21 (Reuters) - Germany denied on Wednesday that any decision had been taken on granting Greece another bailout, playing down comments from its finance chief who broke a pre-election taboo by describing a new rescue as inevitable.

Finance Minister Wolfgang Schaeuble's comments, made at a small campaign event in northern Germany on Tuesday, directly contradicted the line of his boss Angela Merkel, who has said repeatedly it is too early to discuss additional aid for Athens.

The minister's remarks played into the hands of opposition parties who have accused Merkel of deliberately covering up the risks of further Greek aid ahead of a Sept. 22 election.

On Wednesday, the Social Democrats (SPD) and Greens demanded that Schaeuble clarify his stance on Greece in parliament. Meanwhile spokesmen for both Merkel and Schaeuble tried to play down the significance of the remarks, telling reporters that the German position had not changed.

"There is no new situation. Nothing has changed," Schaeuble's spokesman Martin Kotthaus said. "Our position remains that we will assess where Greece stands in 2014 and whether additional measures may be needed."

He added that he was not aware of any discussions on how to structure a new Greek package. Athens has received two rescues from its European partners and the International Monetary Fund worth a combined 240 billion euros ($322 billion).

The opposition SPD derided the government's response.

"It is pitiful that Wolfgang Schaeuble no longer stands by his remarks of yesterday. He clearly went too far and has been reined in by Mrs. Merkel," said Carsten Schneider, an SPD lawmaker. "I expect Mr. Schaeuble to explain himself in front of the budget committee and to lay all the numbers on the table."

The IMF estimated last month that Greece would face a funding gap for the 2014-2015 period of nearly 11 billion euros. According to a report earlier this month in German magazine Der Spiegel, the Bundesbank views the risks of the current programme as "extremely high" and believes a new bailout will be necessary by early next year at the latest.

Merkel, in her first comments on Greece since Schaeuble spoke on Tuesday, stuck to her line that it was too early to discuss another package, or to speculate how large it could be.

"I can't say today what kind of sums might be necessary," she told broadcaster Sat.1. "Only in the middle of next year will we be able to say."

Merkel's conservatives have a comfortable lead over the opposition Social Democrats (SPD) one month before the election, and she is widely expected to win a third term.

But it is unclear whether she will win enough votes to continue her centre-right coalition with the Free Democrats (FDP), her preferred partners.

As Europe's largest economy, Germany has the biggest exposure to Greece. German voters are deeply sceptical about providing more bailouts to euro zone partners, and Merkel could lose crucial votes if the impression emerges that she is being less than forthright about Greek risks.

Schaeuble made his comments to an audience of roughly 250 people, many of them pensioners, in the town of Ahrensburg, which lies between Hamburg and the Baltic sea coast.

German media speculated on Wednesday about whether Schaeuble, perhaps the most outspoken and independent member of Merkel's cabinet, had deliberately sent a signal about a third package to ensure he could not be accused of misleading voters about Greek risks after the election.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.