Schäuble: The current Greek programme would be obsolete without the IMF


Wolfgang Schäuble, the finance minister of Germany since 2009, spoke with The Wall Street Journal in an hour-long interview at his Berlin office on Friday. Following are excerpts from the interview.

On President-elect Donald Trump and the relationship with the U.S.:

“Even in Germany, not everything that is said during an election campaign becomes policy after the election.”

“There are so many [of Mr. Trump’s tweets] that one picks up enough of them, even if one doesn’t see each one in real time.”

“I’ve always been a big supporter of the trans-Atlantic relationship…I will try to work as constructively as possible with the president that American voters have elected and with the administration he is building.”

“I have great confidence in the United States of America. I wasn’t surprised but satisfied to see what the designated secretary of state said in the Senate about the significance of the trans-Atlantic alliance, and this has fortified my confidence.”

“I will soon be working together with the new administration in the U.S., and I will do all I can to make sure this cooperation is as good as possible. I will do nothing ahead of time to make it more difficult.”

On trade and protectionism:

“We all must do everything in our power to oppose protectionist tendencies…We won’t be able to achieve the sustainable global economic development that is essential to security, stability and the fight against international terrorism if we fall back into protectionism.”

“I’m not teaching anybody any lessons [on protectionism]. I represent the German position, and this position—in line with everything we’ve agreed in the G-20 over the past few years—is that open markets are the best path to sustainable growth in all parts of the world.”

“Whoever wants growth—and I trust this [U.S.] administration will be a growth-friendly one—must be in favor of open markets…Protectionism can afford short-term advantages but is almost always damaging in the long term, especially for those who adopt protectionist policies. That is the German experience.”

On Russia:

“We have a considerable segment of the population that speaks Russian in their homes. Some people are being misled by fake news from Russian-language, state-financed and state-directed television. One cannot describe this as anything but a propaganda war.”

”We must counter these attempts to influence through defamation and lies and false news. I’m thankful that the American intelligence agencies are raising awareness of these dangers.”

“Those who are not committed to democracy had better not manipulate the democratic decisions of countries that are inarguably democracies. We’ll resist this.”

“We’re not thinking of operating with similar lies and defamations. We have no plans to engage in a competition of unseriousness with anyone.”

On past U.S. criticism of Germany’s export-oriented economic model:

“Our focus has always been sustainable growth…Our economic growth shows that we’re fulfilling the American request to make a substantial contribution to stable economic development in Europe.”

“Before quantitative easing, I told the Eurogroup that if the European Central Bank went ahead with such a policy, which may be appropriate for other members of the eurozone…then automatically, Germany’s [current-account] surplus would rise. This is exactly what happened.”

On fiscal discipline in the European Union and Euroscepticism:

“We don’t give others advice. We abide by the rules that we jointly agreed on in Europe and suggest others do the same because otherwise, these rules would be worthless and this would undermine the public’s trust in European institutions and decisions, which is what you call euroscepticism—the consequences of which we are observing in many European countries, including Germany.”

On Brexit:

“I think the U.K. has yet to decide where it wants to be in the end. It is becoming increasingly clear that the exit from the EU is going to be complicated and time-consuming for all involved. That is why we’re seeing these debates about transition regimes…But you can only seriously start to think about transition regimes when you know what the target is, the end state.”

“I’ve just had a very extensive brainstorming discussion with Phil Hammond [Chancellor of Exchequer]. It wasn’t a negotiation but a discussion to help the British government—and Britain’s EU partners—to get clarity about the various options.”

“We cannot separate the single market from the main freedoms of the EU. That is the problem, and there are various models to address this. It seems the European Economic Area isn’t a solution for the UK…The Swiss have a slightly different relationship. Switzerland must accept the rules, but it does this on the basis of its own sovereign decision. Is that a possible model? I don’t want to give Britain any advice.”

“Whether a simple trade deal is the best basis for the future relationship between the U.K. and the EU, that could be difficult. When you compare the situation of those countries with whom we have trade agreements with that of those who are members of, or have privileged access to, the single market, there is a huge difference. I think the British government will think about this very hard. It isn’t the optimal solution.”

“Brexit is something that concerns us deeply both in economic and political terms. We need an outcome that addresses these concerns.”

“London as a financial center will play an important role for Europe even after Brexit.”

On taxation in Germany:

“Now that we have completed our fiscal consolidation, we would like to take bigger steps to limit the tax burden in the next parliament…We have room for tax reductions that we would like to take advantage of.”

“We must stay competitive in the area of business taxes given global developments…When one makes tax policy, one must always consider tax rates, as well.”

On the risk that the International Monetary Fund could pull out of the current support program for Greece:

“Should it not come to a successful second review [of the steps Greece must fulfill under its support program], and should the IMF draw the consequences from this, then the current program would be obsolete. The program was agreed to only on the expectation that the IMF would participate.”

“If it became obsolete, then we would have a situation in which one would need to come up with something new. I wouldn’t recommend this to the Greek government. But I would be completely relaxed. The German Bundestag would first need to discuss and agree on whether or not it approves negotiating a new program.”

Source: The Wall Street Journal