Germany defends Greek bailout deal

GERMAN finance minister Wolfgang Schaeuble has denied that this month’s Greek bailout deal paves the way for a future “transfer union”, in which eurozone countries are liable for each others’ debts.

Mr Schaeuble’s remarks in a newspaper interview published yesterday follow his attempt earlier this week to reassure conservative political colleagues that a new eurozone rescue fund would not have “carte blanche” to buy the bonds of states in difficulty.

Bundesbank president Jens Weidmann warned last week that the €109 billion aid package for debt-stricken Greece weakened incentives for eurozone countries to maintain solid finances and led towards a fiscal transfer union.