In for another round in the never-ending Greek story

ON Wednesday morning, German Finance Minister Wolfgang Schäuble addressed once again the German legislature and promoted a third bailout for Greece. Parliamentarians were asked to interrupt their summer holidays for the second time this year in order to deal with the ongoing matter. After a harsh debate the bailout programme, of the size of 86 billion euros (S$134.8 billion) under the European Stability Mechanism (ESM), was approved with a majority of 454 (yes) to 113 (nay) and 18 (abstention).

Mr Schäuble mentioned that he himself found arguments for and against further financial support for Greece and that one could not anticipate the future. He indicated that the Greek crisis had also resulted out of an "incomplete construction of the currency union" and that a "stronger, capable Europe" was needed. After all, however, the Greek government had integrated important legislative steps in order to regain trust and make a deal possible.

Last Friday, the Greek Parliament had concluded pushing through a sequence of harsh preconditions aimed at boosting public income by, among others, raising the value-added tax, selling state companies and reforming the pension system. On the same day 19 eurozone finance ministers gathered in Brussels and gave the green light for the bailout package, which has now been approved by the German Bundestag. The head of the Eurogroup, Jeroen Dijsselbloem, as well as Mr Schäuble in his speech, explicitly excluded the option of a haircut, which would violate EU treaties, and insisted on having the International Monetary Fund (IMF) on board.