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Senior German ministers bicker over more money for Greece, EU

By Michelle Martin

By Michelle Martin

BERLIN (Reuters) - Germany's finance minister on Friday criticized his own government's foreign minister for saying more money should be given to Greece and the European Union, as differences between the two parties in the ruling coalition bubble up six months before an election.

Debt-laden Greece has struggled to implement reforms in return for financial support, much of which has come from the EU. Germany, a major contributor to the EU's aid for Athens, holds elections in September.

Foreign Minister Sigmar Gabriel, a member of the Social Democrats (SPD) - junior partner in Chancellor Angela Merkel's 'grand coalition' - said on Twitter: "In the next debate on Europe's finances we could do something 'outrageous' - namely signal willingness to pay more."

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And during a visit to Greece Gabriel, who is also vice chancellor, held out the prospect of more aid for the troubled country. While Germany has demanded austerity in Greece in return for aid under Merkel, the SPD is ready to put a bigger emphasis on growth and investment.

Wolfgang Schaeuble, a veteran member of Merkel's Christian Democrats (CDU), told Deutschlandfunk radio that Gabriel's suggestion to give the EU and Greece more cash "goes in the wrong direction completely" and sent the wrong message.

"I was annoyed that while in Greece Mr Gabriel gave the Greeks a message that doesn't help the Greeks but rather makes it more difficult for them to make the right decisions," Schaeuble said.

Saying Germany must give more money to the EU would not solve the problem and would give countries the wrong incentive, Schaeuble said. He added that the problem in Europe, like in Greece, was not money but rather using it correctly.

SPD General Secretary Katarina Barley criticized Schaeuble for acting like a "taskmaster" and accused him of failing to understand how Europe works. In view of Britain's decision to quit the EU and the election of U.S. President Donald Trump, it is more important than ever before that countries treat each other with respect, she said.

"Finance Minister Schaeuble's never-ending Greece bashing is annoying and doesn't help anyone," she said. "Mr Schaeuble is dividing Europe and is stoking uncertainty."

During a government news conference on Friday a spokesman for Gabriel said the foreign minister had got the impression during his trip to Greece this week that an agreement on Greece's current reform review was not far off.

But a spokeswoman for Schaeuble said Athens needed to do more on essential areas such as pensions and the labor market before the reform review could be completed.

Gabriel's spokesman said while Greece needed further reforms, it had already "come a very long way" and implemented painful reforms, stressing: "We want the euro zone to stay together."

Schaeuble told Deutschlandfunk Greece could only stay in the euro zone if it had a competitive economy. He added that Athens needed to carry out structural reforms and Greece would need time for that, which it would be granted.

"But if the time is not used to carry out reforms because that's uncomfortable, then that's the wrong path," Schaeuble said.

Disagreements among Greece, the EU and the IMF, which has yet to decide whether it will participate in the country's current bailout, have delayed a crucial review of the aid program.

(Additional reporting by Gernot Heller; Editing by Toby Chopra)