Rift in E.U. Widens Over Importance of Greek Aid

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Dus nu komt de aap uit de mouw: verkiezingen in mei en steun aan
Griekenland kan haar regering laten struikelen.

Het is wel een onderwerp dat veel mensen bezig houdt.
In ieder geval de schrijvers in de NRC: in de week-end editie 8
artikelen over steun aan Griekenland.
Eén daarvan bepleitte het vergeten van Griekenland en in plaats daarvan
de VS te steunen in de strijd tegen de Chinese Yuan ;)

Alles bij elkaar krijg je de indruk dat iedereen het oneens is met
iedereen, en zo gebeurt er niets. Althans niets voor Griekenland,
natuurlijk wél de afbraak van de Euro als algemene munt.

Groet / Cees

March 21, 2010
Rift in E.U. Widens Over Importance of Greek Aid
http://www.nytimes.com/2010/03/22/business/global/22euro.html
By JACK EWING and STEPHEN CASTLE

ATHENS — The rift over how to solve the Greek debt crisis widened Sunday
between Berlin and the rest of Europe after Chancellor Angela Merkel of
Germany said there was no need to make aid to Athens the main topic of a
European Union summit meeting set for Thursday.

Greece should solve its own problems and does not yet need aid, Mrs.
Merkel said during an interview on Deutschlandfunk radio Sunday.
“Therefore, I don’t think it’s advisable to upset the markets by raising
false expectations for the summit on Thursday,” she said. “If Greece
doesn’t need any help, then I don’t think the issue should be in the
foreground.”

With state elections in May, where a loss could cost her government its
majority in the upper house of Parliament, the chancellor is under
strong domestic pressure to avoid a bailout of Greece.

But her statements were out of sync with other European leaders ahead of
the summit meeting. Prime Minister Silvio Berlusconi of Italy told
reporters on Sunday that if “within the European Union there is no
willingness to help a country which has the euro currency and is in the
middle of a crisis, then the European Union has no reason to exist,”
according to a report by Reuters.

Ms. Merkel also seemed to be rejecting a direct call from José Manuel
Barroso, president of the European Commission, for a decision on a
bailout mechanism at the summit meeting.

On Friday, Mr. Barroso said the commission was “ready to propose an
instrument for coordinated assistance to Greece.” He added, “We cannot
prolong any further the current situation.”

Germany has been stubbornly resisting pleas by the Greek prime minister,
George A. Papandreou, for a detailed support plan that would reassure
bond investors and lower the country’s high borrowing costs. Investors
currently demand more than 6 percent interest on Greek debt, double the
rate for German debt.

Speaking to members of his party Saturday, Mr. Papandreou indirectly
criticized Germany for failing to support a concrete rescue package, a
stance he said put the entire euro zone at risk.

“Many forces forget the political importance of the euro and overlook
the essence of the political vision of the European project, which is a
joint effort to develop our economy with a calm and stable climate,” Mr.
Papandreou said. “This could end up destabilizing the E.U. and leading
us in the opposite direction to that of those who inspired and created a
united Europe and its common currency.”

Mrs. Merkel, however, stuck to her position Sunday that talk of aid to
Greece was premature and would ultimately weaken the euro. Her comments
reflect resentment among German taxpayers that while they had
successfully tightened their belts, they might be called upon to rescue
a country that had failed to keep its economy competitive and even
altered documents to make it appear that its budget was within euro-zone
guidelines.

“The best solution for the euro is if Greece solves its problems alone,
naturally with political support from European heads of government,”
Mrs. Merkel said.

The finance ministers from euro-zone countries agreed last week that, if
aid were needed, member countries would coordinate to provide loans from
the stronger nations, said Jean-Claude Juncker of Luxembourg, chairman
of the group from the 16 member states.

But subsequent statements from the German government cast doubt on
whether even this vague deal was real. European Union officials said
there was widespread frustration at the conflicting signals coming from
Berlin which, they believe, have been prompted by hostile public opinion
in Germany.

Meanwhile, opposition to involvement in a potential rescue by the I.M.F.
was in retreat, and it appeared likely that the organization would play
a central role, even if a bailout were coordinated by the Union.

Support for that prospect came Sunday from the secretary general of the
Organization for Economic Cooperation and Development, Angel Gurría, who
told the Greek newspaper Kathimerini that he was confident Greece would
emerge from its fiscal crisis as long as it received a support package.
He said the I.M.F. should play a role.

“Greece is a member of the I.M.F. Why should it not seek help?,” he was
quoted as saying. “As things stand, the I.M.F. is probably the best
solution.”

“I believe the best approach is a combination of support, funding and
guarantees, and I see the I.M.F. in this combination,” he continued.
“You cannot emerge from this crisis on your own in spite of the measures
you have taken.”

Flemming Larsen, former Europe director at the fund, also said that the
most likely outcome would be combined European-I.M.F. support. “It’s now
too dangerous to leave Greece without support,” Mr. Larsen said by
telephone from France. “It’s a matter of urgency to stop the blame-game
and get something in place.”

Mrs. Merkel, who has indicated that she is open to involvement by the
fund, also played down an apparent split with the German finance
minister, Wolfgang Schäuble, who has said that the Union needs its own
fund to deal with fiscal emergencies among its members.

“I support him,” Mrs. Merkel said, while noting as Mr. Schäuble has said
that the new institution would not be in place in time to help Greece.
She repeated that euro-zone countries needed a way to sanction wayward
members, including ejecting them from the monetary union “as an absolute
last resort.”

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