Germany's vice chancellor told Stern magazine Tuesday that allowing Greece into the eurozone was "naive." Speaking two days after the Greek referendum rejecting terms set by its international creditors for a new bailout, Sigmar Gabriel urged greater financial reforms in Greece and greater regulation and fiscal monitoring of European countries.
"The entry of Greece into the euro is, carried out from today's perspective, very naive," said Gabriel, according to the Telegraph. "Worse, however, is that everyone watched on for much too long" during Greece's "fall from good fiscal standing."
Germany is currently the largest holder of Greek debt. Gabriel said the Greek government needs to address the yearly deficit and financial mismanagement before further bailouts, reducing its debt.
"If we simply emphasize debt, not that much will change fundamentally in Greece. Nothing is won," he said, according to Ekathimerini. "Only talk about the possibility of decreasing the debts when the Greek government also shows that it is implementing reforms."
Greece failed to make a scheduled debt payment of 1.5 billion euros ($1.7 billion) to the International Monetary Fund last Tuesday, putting the country in arrears. The nation has been in the midst of a financial crisis since 2009 and was bailed out by the IMF, the European Central Bank and the European Commission in 2010, which imposed strict austerity measures, strongly supported by Germany, that cut budgets and sharply raised taxes.
Many Greeks blame the current crisis and potential default on the austerity measures, which they claim have limited economic development and made it more difficult for the country to pay off its debt.
But Gabriel said the problem derived from a lack of oversight of the behavior of countries within the eurozone. The lesson of the crisis was "never again to look away when a country doesn't keep the rules in Europe," said Gabriel, according to Ekathimerini, adding, "At the end, we will find a way out of the crisis in Greece."