Bundesbank chief warns Greece on rescue deal

Page last updated at 02:52 GMT, Saturday, May 12, 2012 - 07:52 EST

Arizona Daily Sun:

The head of Germany's central bank is warning that there would be no basis for further financial aid to keep Greece afloat if the country backs off agreements with international creditors.

The comments by Bundesbank chief Jens Weidmann, who is also a member of the European Central Bank's governing council, came as Greek politicians, deeply divided over the value of austerity and reform measures that creditors demanded in exchange for rescue loans, flounder in efforts to form a new government.

"If Athens doesn't stand by its word, that is a democratic decision _ but that means the basis for further financial aid falls away," Weidmann was quoted Saturday as telling the German daily Sueddeutsche Zeitung. "The donor countries also have to justify themselves to their population."

Bailing out countries such as Greece has been unpopular in Germany and other prosperous nations.

Asked about a possible Greek exit from the 17-nation euro, Weidmann said that "the consequences for Greece would be more serious than for the rest of the Eurozone."

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