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UPDATE 1-Germany divided on Greece as ministry criticises reform plans
August 12, 2015 / 4:18 PM / 2 years ago

UPDATE 1-Germany divided on Greece as ministry criticises reform plans

BERLIN, Aug 12 (Reuters) - Germany’s Finance Ministry has criticised a draft agreement between Greece and its international lenders as showing “no full clarity on the direction of policies”, in a sign of persistent divisions in the German government over the bailout and Greek reform plans.

By contrast, the Economy Ministry took a positive view on the memorandum of understanding (MoU), an official in the ministry said.

Earlier on Wednesday, Chancellor Angela Merkel’s spokesman welcomed the MoU as a “substantial result” which went in the “right direction”. The conflicting messages highlight the tensions within Merkel’s coalition government on Greece.

Finance Minister Wolfgang Schaeuble, a member of Merkel’s conservatives, has taken a hawkish stance throughout negotiations on the bailout and has made clear his preferred solution is a Greek exit from the single currency bloc.

Economy Minister Sigmar Gabriel is vice chancellor and leader of the Social Democrats, junior partner in the ruling coalition.

While Gabriel has switched from espousing an end to austerity policies demanded by the country’s creditors to accusing Greeks of tearing down bridges to Europe, he has generally sounded less hawkish than Schaeuble.

The MoU lists a range of measures that the Greek government must implement in order to obtain a new three-year bailout programme that is expected to total roughly 85 billion euros.

In a two-page paper entitled “preliminary check of MoU”, the Finance Ministry described Greek reform plans on debt sustainability and privatisations as “not yet compliant”.

A Finance Ministry spokesman said Berlin was not rejecting the bailout plan for Athens and that the ministry had simply raised questions about the MoU.

“We have formulated questions. These are part of the examination process, which is not yet finished,” a ministry spokesman said, adding that the questions were for discussion by euro zone finance ministers, who are expected to meet on Friday. (Reporting by Gernot Heller; Writing by Paul Carrel; Editing by Digby Lidstone)

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