March 11, 2012 / 11:36 AM / in 6 years

Germany's Schaeuble confident on Greece

MILAN (Reuters) - German Finance Minister Wolfgang Schaeuble said on Sunday he was confident Greece was on the right path for recovery after tough decisions to secure a second bailout package.

However, he warned there could be no guarantee of success.

“I am confident the difficult measures decided with the government in Athens will put it on the road to recovery,” Schaeuble said in an interview in Sunday’s La Repubblica newspaper.

Greece averted the immediate threat of an uncontrolled default on Friday when private creditors agreed on a bond swap that will cut the country’s public debt and clear the way for a new 130-billion euro ($170.55 billion) bailout.

Schaeuble said he was sure the best decisions possible had been taken against a backdrop of uncertainty.

“But it wasn’t easy and I cannot give a 100 percent guarantee of success,” he said.

Schaeuble said the need for another aid package for Greece could not be ruled out, but said “it is not the time to speculate but to approve the second package for Athens.”

The austerity programmes did not create recession, he said, adding structural reforms were now needed to relaunch growth.

He said the fiscal compact was an important step towards building a more solid and stable Europe, but that the idea of eurobonds could only be considered after a common fiscal policy had been created.

The job of the European Central Bank was to provide liquidity for the euro zone and control inflation, Schaeuble said, adding it should not be given powers similar to those of the U.S. Federal Reserve.

“The ECB cannot, and should not, finance member state debt,” he said.

Asked about Italy’s technocrat Prime Minister Mario Monti, Schaeuble said the markets trusted him. “He is a beacon of hope, not just for Italy but for the whole of Europe.”

German Chancellor Angela Merkel is scheduled to meet Monti in Rome on Tuesday.

($1 = 0.7622 euros)

Reporting By Stephen Jewkes; Ediitng by David Hulmes

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