Schaeuble criticises foreign minister for saying Germany should pay more to EU

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble on Friday criticised Foreign Minister Sigmar Gabriel for saying Germany should provide more money for Greece and the European Union overall.

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.

Gabriel, vice chancellor and a senior member of the Social Democrats (SPD) - junior partner in Chancellor Angela Merkel's ruling coalition - said on Twitter: "In the next debate on Europe's finances we could do something 'outrageous' - namely signal willingness to pay more." And during a visit to Greece he held out the prospect of more aid for the troubled country.

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.

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

On whether Greece can stay in the euro zone, Schaeuble said: "Greece can only do that if it has a competitive economy."

He said the country 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 programme.

(Reporting by Michelle Martin and Gernot Heller; Editing by Hugh Lawson)