EuroCrisis: Greece Will Not Get German Funding

Greece faces a financing gap of 14 billion euros in each of the next two years, a delegation from the so-called troika of the European Commission, European Central Bank and International Monetary Fund has found, according to Spiegel magazine today. That compares with a previous estimate of 11.5 billion euros a year, Spiegel said, without saying where it got the information.

The sovereign-debt crisis mustn't become a "bottomless pit" for Germany, even though Europe's biggest economy would pay the highest price in a breakup of the euro region, Schaeuble said. Greek Prime Minister Antonis Samaras wants the country's fiscal adjustment program to be extended by two years to the end of 2016.

German Finance Minister Wolfgang Schaeuble ruled out another aid program for Greece even though the country is in a "very difficult situation" with a shrinking economy.

"It can't be helped - we can't make yet another new program," Schaeuble told visitors today at his ministry's open day in Berlin. "There are limits."

Bailout money was used to fund Government spending, whilst austerity has served only to shrink economies and increase the relative size of the debt. Since 2010 the Greek government's external debt has increased from 118% of GDP to 150% in 2012. The economy has shrunk by 15% since the start of 2010 and unemployment has reached 19%.

The number of Greeks out of work has risen to a new high, with more than one million people unemployed, especially the young, official data shows.

The latest data, published on Thursday, showed that the country's jobless rate climbed to 23.1 per cent in May from 22.6 per cent in April.

Almost 55 per cent of Greeks aged 15-24 are out of work, a desperate situation that fed into the popularity of anti-bailout parties in Greek elections this year.

The government announced plans to revive a labour reserve measure targeting 40,000 public servants for eventual dismissal, in a drive to achieve 11.5bn euros in savings promised to international lenders.

Government officials citing this scheme said Athens intends to shed tens of thousands of temporary contract workers by streamlining its needs across ministries and state entities.

Unemployment in Greece is already more than twice the average rate in the 17 countries sharing the euro and nearly as bad as in Spain where the jobless rate registered 24.6 per cent in the second quarter.

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