German Finance Minister Wolfgang Schaeuble attends an Informal Meeting of Ministers for Economic and Financial Affairs in Athens on April 1. Image Credit: AFP

Athens: German Finance Minister Wolfgang Schaeuble on Sunday defended Europe’s handling of Greece’s debt crisis, saying there was no easier way to rescue the debt-laden country from crisis.

“Unemployment in Greece isn’t the result of European policy. That assertion is a fallacy,” he said in an interview with Greek daily Kathimerini.

“Don’t listen to those who say that there was an easier solution,” he said, referring to the harsh austerity measures enforced by the International Monetary Fund and European Union when they bailed out Athens from its debt crisis.

Greece, which has only been able to issue short-term bonds since its rescue in 2010, expects to return to borrowing normally on international debt markets before June.

That marks a turnaround after six years of crippling recession that has slashed the country’s gross domestic product by a quarter and sent unemployment soaring to more than 27.5 per cent.

The troika of lenders — the International Monetary Fund, the European Commission and the European Central Bank — have faced criticism for their handling of the crisis, including from the EU’s own lawmakers.

In June 2013 the IMF admitted it had underestimated the damage done to Greece’s economy from spending cuts and tax hikes imposed in a bailout, which was accompanied by one of the worst economic collapses ever experienced by a country in peacetime.

But Schaeuble said Sunday that “recent economic data from Greece shows that it is on the right path” to escape its financial rut and that its “public finances are already better than the programme had anticipated”.

“The stabilisation is faster and better than expected,” he is quoted as saying in the Greek daily.

Any new rescue loans would therefore be “much smaller than the previous two,” which totalled €240 billion ($329 billion), and the conditions attached would be “less heavy,” he said.

Germany has stuck fast to its demand that Greece continue to rein in its public debt to 124 percent of GDP by 2020, down from 175 per cent now.

The write-off of more than 100 billion euros of Greece’s debt owned by private investors in 2012 must remain a “unique case,” Schaeuble added.