Reuters: Regulatory News: UPDATE 1-German finmin Schaeuble sees euro zone intact next year

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UPDATE 1-German finmin Schaeuble sees euro zone intact next year Sep 5th 2012, 12:16 Wed Sep 5, 2012 8:16am EDT BERLIN, Sept 5 (Reuters) - German Finance Minister Wolfgang Schaeuble said on Wednesday he believed the euro zone would still have 17 members next year, in the latest sign that Berlin is intent on keeping Greece in the single currency bloc. Schaeuble has been one of Greece's most vocal critics, rejecting the notion that Athens should receive more time to carry out reforms, as Prime Minister Antonis Samaras wants. But his comments to a radio station on Wednesday suggest a more flexible German line. Other senior members of Chancellor Angela Merkel's Christian Democrats (CDU) have stressed in recent weeks that a "Grexit" would have worrying geopolitical as well as financial consequences. "I expect that the euro zone will still exist in the same form next year as now, with all 17 (member states)," Schaeuble told rbb-Inforadio. Greece is under pressure to identify nearly 12 billion euros in cuts for the next two years to appease its international lenders, the European Union (EU) and the International Monetary Fund (IMF). Inspectors from the so-called "troika" of the EU, IMF and European Central Bank are due in Athens this week and are expected to publish a report on Greece's progress next month. German government officials have said repeatedly that they will wait to see the contents of that report before taking any decisions about Greece's fate. Merkel has also warned members of her sister party, the Christian Social Union (CSU), against talking up the likelihood of a Greek exit. Alexander Dobrindt, a leading member of the Bavarian Christian Social Union (CSU), sister party to Merkel's CDU, came under sharp criticism in the media and from other politicians last week for predicting that Greece would no longer be a member of the currency bloc next year. Schaeuble said in the radio interview that he expected the euro would be "a bit more stable" next year but that it would take time to rebuild the trust of investors. He stressed that Greece was a special case, a familiar refrain from German politicians keen to ringfence the country from other larger southern economies such as Italy and Spain which are now also experiencing chill market winds. "We had to implement completely extraordinary, unique measures for Greece - a haircut of more than 50 percent, two aid programmes of a size that we have never before seen in the history of the IMF," he said. "The Greek problems are completely unique and that's why Greece's burdens are very big." Merkel, who faces an election next year, is believed to be reluctant to take the risk of cutting off aid to Greece, a step that could push it out of the bloc and set off contagion to other euro members. But she faces growing popular opposition to helping Greece. A Financial Times/Harris opinion poll published on Monday showed only a quarter of Germans thought Greece should stay in the euro zone or get more help from other countries. Link this Share this Digg this Email Reprints

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