Merkel: Eurozone must avoid Greek exit

 

German Chancellor Angela Merkel told Newsnight's Gavin Esler that the Eurozone must hold together

German Chancellor Angela Merkel has told the BBC it would be a huge political mistake if debt-stricken Greece was allowed to leave the euro.

In an exclusive Newsnight interview, she said Germany would do everything it could to keep the eurozone together.

She also calmed fears of further bailouts for eurozone countries, saying important lessons had been learned.

And she applauded the UK government's austerity programme, saying "no country can live beyond its means".

Greece recently won approval for a second bailout of 130bn euros ($173bn; £110bn) intended to help keep it afloat until 2014.

Germany is having to pay more than any other country for the package - angering many German citizens and politicians.

Despite the measures, some analysts fear Greece might need even more help.

Political unity

Asked how she saw the future for Greece, Mrs Merkel told the BBC's Newsnight programme that Athens had repeatedly said it wanted to remain within the eurozone.

"It has major weaknesses but it is trying to overcome them, be they in the administration or the competitiveness of their business community. It is going to be a long and arduous road," she said.

"We have taken the decision to be in a currency union. This is not only a monetary decision, it is a political one. It would be catastrophic if we were to say to one of those who have decided to be with us: 'We no longer want you'."

Protest in Athens. 29 Feb 2012 Severe cutbacks across Greece have triggered widespread protests

She said the eurozone would be "incredibly weakened" by a Greek exit.

"People all over the world would ask: 'Who will be next?'"

She added: "It would be a huge political mistake to allow Greece to leave. That is why we will be clear with Greece, we will say: 'If you want to be part of a common currency you have to do your homework but at the same time we will always support you.'"

Mrs Merkel said democracies had grown used to spending more than they earned, and had to be more careful to live within their means.

Asked to respond to those in Europe who feared further bailouts she said: "That is not how it is going to happen because there has been a rethink going on in Europe for some time.

"Some countries accepted the rescue package but they don't particularly relish it. They must follow conditions set out by the IMF, the ECB and the European Commission. What democratic government wants to be in that situation for the duration?

"Over the past two years in Europe, particularly in the eurozone, we have learnt a lot. We must reflect time and again, why are we together in Europe? Why are we a community that displays solidarity and bears responsibility for the others?"

Angela Merkel told Newsnight's Gavin Esler that Britain must decide how much it wants be part of Europe

Mrs Merkel said Europe - and particularly the eurozone area - had "slithered into crisis" as a consequence of a global financial downturn.

"It is a very tense situation right now," she said.

She said she believed that UK Prime Minister David Cameron "was right" to have embarked on an austerity drive.

"It is something that each country in Europe can do because we will all learn that no country can live beyond its means," she said.

"All European countries have understood this lesson. But we in the eurozone are convinced that together, we are so much stronger."

'Common ground'

Asked if she could envisage the UK playing a bigger role in Europe than it does now, she said: "Britain plays a very important role in Europe.

"Britain has a lot of common ground with Germany on how we see the future of free global trade, we all benefit from it.

"At the end of the day the British have to decide for themselves to what extent they wish to be part of Europe.

"It is a discussion that we have seen unfortunately taking a painful turn on the [recently agreed] fiscal compact but Britain needs to know that we in Germany want a strong Britain in the EU, we always have and we always will."

She added: "In Germany we will try to see that there is less red tape, more political decisions and more transparency. I think that we are at one on this with Britain."

Watch the full interview with Angela Merkel on Newsnight on Monday 26 March 2012 at 10.30pm on BBC Two, then afterwards on the BBC iPlayer and Newsnight website.

 

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  • rate this
    +24

    Comment number 31.

    What Angela really means is that Greece leaving the EuroZone would not be good for German BANKS who would lose on their so-called "loans" to the Greek GOVERNMENT. The best interests of the German BANKS are NOT the best interests of the Greek PEOPLE, only the Greek GOVERNMENT...because the current Greek government was never elected by the Greek people...just appointed and not elected.

  • rate this
    0

    Comment number 30.

    IMHO Mrs. Merkel is a very intelligent and strong person. She has shown a lot of stress resistance during the last months, being attacked on a daily basis. I wish her well.
    And of course she is right in her suggestion that Britain should clarify her position in a future EU.

  • rate this
    +9

    Comment number 29.

    How many votes were cast for Lucas Papademos?

  • rate this
    +1

    Comment number 28.

    Merkel's messaging is getting crisper. Good, the presentation of germany's position has been bad.

    Like she said, there's a lot of lessons to be learnt. One is, that populism can really flourish in times of economic turmoil.

  • rate this
    +1

    Comment number 27.

    Is Germany playing a control game? It is very possible, and whilst I deplore it, one day we might actually applaud it. You see China is steadily buying up the debt of USA and elsewhere, and one day not only will their exports be controlling the world, but their finances too. So if Merkel has a good crystal ball maybe she is right. If not - let Greece go and not be an extention of German power.

  • rate this
    +4

    Comment number 26.

    'Lessons learned'? But the problem is not resolved. Greece & other net importers continue to slide deeper into debt. Not buying anything (austerity) will not pay off the interest.

    The Euro will work only when all the Euro countries find a way to share debt.

  • rate this
    +4

    Comment number 25.

    Greek exit? Doubtful as Greece is in hoc to Germany etc. What chance of Greece on her own, and probably unable to borrow at all, other than at draconian rates of interest.

    Despite Merkel appearing benevolent, she has made sure that Greece has no exit, but faces a future of servitude to Merkel's dream of a German dominated Europe. Austerity is the tool, hence her praise for DC's plan for UK.

  • rate this
    0

    Comment number 24.

    Greece is one of the best examples of the politicians promising anything to get elected. But if we're in Europe together we should all be equal.

  • rate this
    +4

    Comment number 23.

    #15. The 'British' can decide lots of things, but they are never asked. The Govt do what they want once elected. Let me see now, the channel tunnel, Iraq, dumping the oil rig in the North sea, Brown selling half the UK gold reserves...The list is endless. I wouldn't have agreed to any of these. we ar like little lambs running around a field. And Greece! Let them leave and we should follow.

  • rate this
    +59

    Comment number 22.

    it will be a "political mistake" eh. Why cant they stop playing politics and be concerned about the economic situation and the social situation of the Greek people.

  • rate this
    +6

    Comment number 21.

    Ms Merkel says it is a "huge political mistake" if Greece was to exit the Euro.

    Yet it's fine to lend a country who has failed to repay its debts even more money?

    THAT is the real mistake.

    In what farcical world can you approach your bank, tell them that you can't make the repayments on the existing money you owe, THEN ASK FOR MORE??

    Lunacy.

  • rate this
    +4

    Comment number 20.

    She wants Greece to stay in the Eurozone only because politicians NEVER know how to admit to having got it wrong......

  • rate this
    +4

    Comment number 19.

    Merkels not saying this for altruistic reasons. If Greece did leave the Euro the direct result on the euro as well as all Western markets would be catastrophic. Thus they will continue to throw money into this black hole in the hope that the problem goes away. Whilst they all bury their head in the sand and collectively ignore the obvious. Greece is INSOLVENT. And so is most of Europe.

  • rate this
    +4

    Comment number 18.

    Of course Germany wants Greece to stay in the Euro, how else are they going to boss it around? Germany and France want to keep the Euro together for their own benefit, NOT to the necessary benefit of the other smaller counties. Germany gets to do what it does best, Boss everybody around and act like they own Europe, Porugal, Ireland, Greece all have to dance to the German Tune.

  • rate this
    -16

    Comment number 17.

    No surpises yet again on how all the UK based comments on this subject are mostly negative and arrogant towards Germany. Proves that most comments here really come from people truly living on an ISLAND !

  • rate this
    +4

    Comment number 16.

    Finally, Merkels true colours are revealed as she views this as purely a political problem.

    The Greek people are suffering badly and to keep ignoring this is very dangerous indeed. Ultimately the people will decide whether the EU survives or not.

  • rate this
    +4

    Comment number 15.

    "At the end of the day the British have to decide for themselves to what extent they wish to be part of Europe".

    Even Angela Merkel is calling for a referendum!

    Greece would be much better off outside the Euro, it would only be a "political" mistake, not an actual mistake. OUtside the euro, it could devalue its currency and benefit from cheap tourism. Inside, it can't do that.

  • rate this
    +64

    Comment number 14.

    They should be doing whats best for Greece not whats best "politically"

  • rate this
    +3

    Comment number 13.

    As suspected, Germany wants to rule Europe. Greece are their own country and can do what THEY want Frau Merkel, so get back to counting in your counting house all the Euro tokens you still have.

  • rate this
    0

    Comment number 12.

    Germany needs Greece a lot more more than Greece needs Germany

    Countries like Greece keep the euro weak, which boosts German exports to the world.

    The Greeks can do whatever they like, including defaulting on debts.

    A Greek default would be fantastic for German exports.

 

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