Germany rattled as taxpayer losses loom in Greece
The EU-IMF Troika of inspectors in Greece has called on European bodies and official creditors to write off a chunk of their loans, opening the way for first taxpayer losses since the sovereign debt crisis began.
By Ambrose Evans-Pritchard
28 Oct 2012
A draft version of the Troika report obtained by Spiegel magazine said EMU governments and the European Central Bank must accept their share of losses in order to bring Greece’s public debt back to 120pc of GDP by 2020, deemed the sustainable level.
Greece must carry out a further 150 reforms, some involving a drastic loss of sovereignty. Troika payments will be held frozen in a special account under creditor control.
The Troika will have power to raise taxes automatically. There must be new laws to make it easier to fire workers and adjust the minumum wage.
In exchange, Greece should be given two extra years until 2016 to meet budget targets, costing up to €38bn.
German finance minister Wolfgang Schauble said over the weekend that taxpayer “haircuts” were unthinkable. “The question has very little to do with the reality in eurozone member states,” he said.