Schaeuble Warns Defaults Can Surprise as Greece Crams for Talks

By Eleni Chrepa

German Finance Minister Wolfgang Schaeuble warned that sovereign defaults can catch officials off guard as Greece prepares for a finance ministers? meeting Monday with the European Central Bank threatening to tighten the screw.

Greek officials are huddling with their creditors before the gathering in Brussels which could determine whether the ECB restricts the country?s access to emergency funding. ECB policy makers are looking for signs of concrete progress from the talks to justify maintaining access to the bank?s Emergency Liquidity Assistance.

?Experience elsewhere in the world has shown that a country can suddenly become unable to pay its bills,? Schaeuble said in an interview with Frankfurter Allgemeine Sonntagszeitung published Saturday.

Schaeuble said he?ll do everything he can to keep Greece in the euro. ?If it fails, it won?t be because of us,? he added.

The ECB is seeking significant progress toward an aid agreement before its next weekly review of Greece?s emergency funding with some Governing Council members calling for the discounts on collateral posted by Greek banks to be increased. On May 6 policy makers discussed tightening access to funds if Greece?s stalemate with its creditors drags on.

?European institutions plus the IMF and Greek authorities are trying to find a solution, but the solution is in the hands of Greek authorities,? European Commission Vice President Jyrki Katainen said.

Brussels Talks

Officials from Greece, the euro area and the International Monetary Fund will hold discussions in Brussels over the weekend, a Greek official said. While both sides have declared progress in the last few days, Dutch Finance Minister Jeroen Dijsselbloem, who leads the euro-area...