By Elizabeth Anderson, and Reuters 04 Jan 2015
A spokesman for Chancellor Angela Merkel said the German government expects Greece to abide by bailout terms, whatever the outcome of the looming general election
A snap general election will be held in Greece on January 25 Photo: YANNIS BEHRAKIS/REUTERS
The German government is confident that Greece will stick to bailout terms set out by the EU and the IMF, a spokesman for Chancellor Angela Merkel has said.
Georg Streiter refused to comment on reports that Angela Merkel believes the Eurozone is now robust enough to cope with a potential exit of Greece, should the looming general election in Greece reignite the Eurozone crisis.
Mr Streiter said that Greece had fulfilled its obligations in the past, and that the German government “assumes it will continue to fulfil its contractual obligations to the troika," in the event of a change of government in Athens after the January 25 election.
The "troika" bailout comprises the European Central Bank, the European Commission and the International Monetary Fund, overseeing Greece's total €240bn (£190bn) bailout package, which has been in place since 2010.
Eurozone ministers recently agreed to give Greece’s government a two-month extension to its bailout, extending its agreement until the end of February, amid fresh concerns over the country’s finances.
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Greece's economy remains nearly 25pc smaller than it was in 2008, and has the highest debt mountain in the euro-area. The country’s unemployment rate is currently 25.6pc.
Even if it continues to grow at a modest rate of 2pc per year – broadly in line with the EU average before the crisis – it would still take Greece 13 years just to get back to its pre-crisis peak, according to the International Labour Organisation.
As the Eurozone's paymaster, Germany insists that Greece must stick to a course of austerity and not backtrack on its commitments. It does not want to open the door for other strugglers to relax their reform efforts.
Greece's woes have also created a political headache for Merkel by helping to boost support for a new right-wing party, Alternative fuer Deutschland, which taps into German voters' unease over the costs of euro zone bailouts.
News magazine Der Spiegel reported on Saturday that both Merkel and Finance Minister Wolfgang Schaeuble now believe the Eurozone has implemented enough reforms since the height of the crisis in 2012 to make a potential Greek exit manageable, depending on the outcome of the general election later this month.
A snap vote will be held on January 25, after politicians recently failed to back Prime Minister Antonis Samaras's candidate for the Greek presidency.
Meanwhile the anti-austerity opposition party Syriza led by Alexis Tsipras, which wants to renegotiate the terms of Greece's bailout, is gathering support.