By Andrew Jay Rosenbaum
ANKARA
German Finance Minister Wolfgang Schauble’s release of a paper critical of the bailout agreement between Greece and its institutional creditors has demonstrated the potential pitfalls in Greece’s path to economic security.
On Tuesday, Athens signed a memorandum of understanding with the Eurogroup, the International Monetary Fund (IMF), the European Central Bank and the EU after weeks of negotiations.
A day later, Schauble, who has been highly critical of the economic reforms implemented by Greece to satisfy creditors, issued a two-page document to the German media picking holes in the agreement.
If the memorandum is approved by the Greek parliament next week, it will be sent for ratification to the parliaments of the 18 other Eurogroup countries. The first tranche of bailout funds will flow to Greece once its fellow eurozone nations agree.
However, Schauble says the agreement leaves too many questions unanswered. He would like to provide Greece with a bridging loan while the issues, as he sees them, are further debated.
The document released by his department on Wednesday compares the memorandum to an original draft signed by Eurogroup members in July, Spiegel Online reported.
According the Finance Ministry, just three of the nine issues addressed in the Eurogroup document are "completely fulfilled" while four are "partially fulfilled" and two are left open completely.
The ministry lists three major issues that it says need to be addressed before completing the bailout.
The first is the anticipated role for the IMF, which has expressed doubts over the viability of the bailout. Schauble’s office says the IMF must be involved in the process.
The German document also questions Greece's ability to pay back the loans it is to receive and notes that the IMF has called for the restructuring of Greek debts. This needs to be clarified before the bailout is ratified.
Finally, the memorandum delays the establishment of a 50 billion euro ($55.5 billion) privatization fund created through the sale of Greek government assets. Getting the fund in place is critical, the ministry says, and it should be run independently rather than remain in the hands of the Greek government.
Schauble would like these questions to be resolved at a Eurogroup meeting on Friday.
There has been little reaction from the other parties to the bailout agreement but the danger highlighted by the Schauble document is that the German parliament could vote against the bailout, putting the whole process in jeopardy.
