BERLIN — Greece retakes its position at the heart of Europe’s debt crisis this week as its creditors assess how far off course it is from bailout targets, raising again the specter of its exit from the euro.
Greece’s international troika of creditors — the European Commission, European Central Bank, and International Monetary Fund — arrive in Athens Monday amid doubts the country will meet its commitments and reluctance among euro-area states to put up more funds.
“If Greece doesn’t fulfill those conditions, then there can be no more payments,” Germany’s vice chancellor, Philipp Roesler, said, adding he is “very skeptical” Greece can be rescued and that the prospect of its exit from the monetary union “long ago lost its terror.”
The delegation is tasked with determining the fiscal position of the nation where Europe’s crisis began almost three years ago. Greece is clamoring for more help as efforts to cut its debt to 120 percent of gross domestic product by 2020 fall short.
And last week, 10-year Spanish bond yields climbed back above 7 percent as concern mounted that policy makers are failing in their efforts to resolve Spain’s crisis.
The IMF, which indicated in March that it won’t commit more money to Greece, will make a decision on its next disbursement in late August, at the earliest, based on the troika’s findings, said two fund officials familiar with the situation.
Prime Minister Antonis Samaras’s three-way coalition, formed last month after a June 17 election ended a six-week political deadlock, has scrambled to assemble budget cuts to convince the delegation.
Finance Minister Yannis Stournaras is fending off pressure to impose more reductions this year as the economy shrinks faster than forecast. He is scheduled to present his proposals to the troika Thursday.
The government is also behind on state asset sales, having so far brought in a fraction of what it aims to raise by 2020, half from sales in company stakes and half from real estate.
German officials over the weekend torpedoed the possibility of renegotiating the terms of Greece’s agreement with its creditors.
Foreign Minister Guido Westerwelle told Hamburger Abendblatt that his Free Democratic Party, the junior partner in Chancellor Angela Merkel’s coalition government, won’t agree to any attempts by Greece to overhaul its bailout terms.
“That won’t work — that’s a Rubicon we can’t cross,” Westerwelle told the newspaper.
“It’s in Greece’s own hands to ensure it stays” in the euro union, he said.
Last month, Westerwelle had said that negotiators might consider giving Greece more time. That option also was rejected by Volker Kauder, the parliamentary caucus leader for Merkel’s Christian Democratic Union.
He told party colleagues that “there will be no adjustment, also no more time,” according to WirtschaftsWoche.
Once taboo, the possibility that Greece could exit the 17- member monetary union has been voiced by European officials this year who consider the fallout from such a scenario would be the lesser evil, comparied to a seemingly perpetual crisis.
Roesler, who is Germany’s economy minister as well as the Free Democratic chairman, told ARD that a curtailment of aid to Greece would lead to a sovereign default, which would in turn lead to “Greeks coming to the conclusion that it is probably wiser to leave the euro area.”
Spiegel reported that German officials were holding off on such a decision until the permanent bailout fund, the European Stability Mechanism, comes into operation in September. It is on hold pending a decision by Germany’s Federal Constitutional Court, set for Sept. 12.