Cookie consent

We use cookies to improve your experience on this website. By continuing to browse our site you agree to our use of cookies. Tell me more | Cookie preferences

Fight brewing over time for Greek austerity

    Just Watched

    Rehn: 'IMF findings can be disputed'

Rehn: 'IMF findings can be disputed' 03:13

Story highlights

  • A fight over the future of the Greek bailout is brewing between two key factions
  • Comes as IMF chief Christine Lagarde requests more time for Greece to meet austerity goals
  • Legarde puts the IMF at odds with fiscal hawks in Germany and other eurozone nations
  • European Commission official: "Even the IMF can be open to criticism. It is not the final word"

A fight over the future of the Greek bailout is brewing between two key factions overseeing Europe's debt crisis, as officials publicly disagreed with the International Monetary Fund chief's call to give Athens more time to adhere to tough austerity measures.

Olli Rehn, vice president of the European Commission, told CNN on the sidelines of the IMF meetings in Tokyo, "even the IMF can be open to criticism. It is not the final word."

His comments follow German Finance Minister Wolfgang Schäuble's rebuke of IMF chief Christine Lagarde's call to give Greece two more years to make stringent austerity measures as required for the international bailout of the country.

"When there is a certain medium-term goal, it doesn't build confidence when one starts by going in a different direction," Schäuble told the Financial Times. "When you want to climb a big mountain and you start climbing down the mountain, then the mountain will get even higher."

Rehn told CNN "(Schäuble) has a point. The EU cannot be making swift turns, rather it is a convoy and you have to carefully consider which policy turns are best."

    Just Watched

    IMF chief: Austerity is hurting growth

IMF chief: Austerity is hurting growth 03:30

    Just Watched

    IMF chief: U.S. fiscal cliff a concern

IMF chief: U.S. fiscal cliff a concern 02:21

    Just Watched

    Chinese official leaves IMF meeting

Chinese official leaves IMF meeting 02:01
Posters in bush

    Just Watched

    IMF economist on global risks

IMF economist on global risks 02:57

More: Lagarde vs. Rehn: Needed debate, or dangerous split?

    The IMF is part of the "troika" which, along with the European Commission and the European Central Bank, is monitoring Greece's progress with austerity measures before approving release of bailout payments. By requesting more time for Greece, Lagarde puts the IMF at odds with fiscal hawks in Germany and other eurozone nations.

    "We are now on the ground with members of the troika, determined to work as hard as is needed, to make sure the program will be on track," Lagarde told CNN Thursday.

    "There's a lot of work to be done, really, and the Greek population and authorities have been serious about operational changes, and they need to continue to be serious -- it's not that there can be a relaxation," she said. "However, and we've said that regularly, Greece needs more time. I have indicated to the euro partners that an additional two years would be very helpful and reasonable for Greece to meet its objectives."

    Lagarde's move comes after the IMF released a study earlier this week that analyzed 100 years of public debt levels and suggested that policies that make quick fiscal cuts often exacerbate sovereign debt woes rather than solve them. The report advocates programs that stimulate growth in tandem with long-term reforms. "Reducing public debt takes time, especially in the context of a weak external environment," the IMF report said. "It is a marathon, not a sprint."

    Rehn told CNN in an interview Friday, "the findings can be disputed and I am looking forward to extensive negotiations on this," he said.

    Earlier this week, German Chancellor Angela Merkel visited Greece as tens of thousands rallied to show anger over the hardships the country is facing. Critics see Merkel as the main enforcer of the European Union-imposed austerity measures.

        Europe's financial crisis

      • German Chancellor Angela Merkel talks with Finance Minister Wolfgang Schaeuble during a session at the Bundestag (lower house of parliament) on June 25, 2013 in Berlin.

        German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
      • IBIZA, SPAIN - AUGUST 21:  A man dives into the sea in Cala Salada beach on August 21, 2013 in Ibiza, Spain. The small island of Ibiza lies within the Balearics islands, off the coast of Spain. For many years Ibiza has had a reputation as a party destination. Each year thousands of young people gather to enjoy not only the hot weather and the beaches but also the array of clubs with international DJ's playing to vast audiences. Ibiza has also gained a reputation for drugs and concerns are now growing that the taking and trafficking of drugs is spiralling out of control.  (Photo by David Ramos/Getty Images)

        Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
      • The Euro logo is seen in front of the European Central bank ECB prior to the press conference following the meeting of the Governing Council in Frankfurt/Main, Germany, on April 4, 2013.

        The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
      • The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.

        The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
      • Packed beaches and Brit pubs? Not necessarily. Here's what drew travelers to one of Spain's most beautiful regions in the first place

        Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
      • Photographer TTeixeira captured these images from a May Day protest in Porto, Portugal, Wednesday by demonstrators angered by economic austerity measures. "People protested with great order, but showed discontent against the government who they blame for this economic crisis," she said. "They want the government to resign and the Troika [European Commission, International Monetary Fund and European Central Bank] out of this country."

        As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
      • Croatian Prime Minister Zoran Milanovic delivers a speech in Mostar, on April 9, 2013. Prime Ministers from Bosnia's neighboring countries arrived in Bosnia with their delegations to attend the opening ceremony of "Mostar 2013 Trade Fair".

        As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
      • Anti-eviction activists and members of the Platform for Mortgage Victims (PAH) take part in a protest against the government's eviction laws in front of the Popular Party (PP) headquarters in Mallorca on April 23, 2013.

        Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
      • People protest against the Spanish laws on house evictions outside the Spanish parliament on February 12, 2013 in Madrid, Spain.

        Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.