Germans and the Greek challenge

 
German Chancellor Angela Merkel with Greek PM Antonis Samaras in Berlin, 24 Aug 12 Mrs Merkel reiterated her commitment to keeping Greece in the eurozone

It is one of the consequences of the eurozone crisis that Greeks and Germans regard each other with suspicion.

There are many Germans who believe that helping Greece amounts to feeding money into a bottomless pit.

Many Greeks suspect that Berlin wants them out of the euro.

So any meeting between the Greek prime minister and the German chancellor draws attention. When they met today they were both formal with each other but were careful to smile a lot.

This was an early round in a drama which will play out during the autumn. Angela Merkel said again that the goal of the federal government is "that Greece is part of the eurozone and I want Greece to remain part of the eurozone".

She had some praise for the Greek leader. "I am deeply convinced," she said, "that the new Greek government, under the leadership of Prime Minister Samaras, is doing everything to solve the problems that Greece is facing".

She also spoke of a new beginning in the relationship between the two countries. The Greek leader, who has irritated the Germans in the past, would have been pleased with that statement.

But there was no commitment to give Greece new concessions or to guarantee that the country will get the next round of bailout money.

"What Greece can expect from Germany," the chancellor said, "is that we will not make premature judgements but will await reliable evidence, which for me means the troika report". The inspectors from the EU and the IMF will give their assessment of whether Greece is living up to its commitments in September. Only then will Angela Merkel decide whether Athens qualifies for further funding.

'Time is money'

Mr Samaras repeated a message he has been delivering to German papers all week. "We don't want more aid," he said, "but we need breathing space". He is thought to be looking for an extra two years to meet the savings targets. Yesterday the German finance minister said "more time would, in case of doubt, mean more money".

The Greek leader hit out at what he called the "toxic statements" that questioned whether Greece was about to leave the euro. Such speculation, he said, made privatisations impossible.

All of this is early skirmishing. The real questions will have to be addressed if the inspectors conclude that Greece is not just failing to meet its targets but cannot make the grade because of the collapse of the Greek economy.

There will be many in Germany who will conclude that "enough is enough". That is unlikely to be the view of the German chancellor. She said today that the euro "is more than just a currency, it's the idea of a united Europe". She went on to say that "a united Europe is irreversible".

The German leader, it seems, is preparing the ground to tell the German people that further sacrifices will have to be made to save the big idea, the grand project. It would be hard to let Greece go when she has declared a united Europe as "irreversible".

She is also risk-averse as a politician and would always fear the unknown of a Greek exit and the possibility of the markets then turning on Italy and Spain. So the expectation has to be of a "fudge", whereby a formula is found for Greece to muddle through.

The difficulty will come if Greece needs further funding. It would be very difficult to get the German parliament to agree to that, but watching Angela Merkel today it was hard to imagine her ever putting Greece in the situation of having to leave the euro and opening herself to the accusation that she had let down the European project.

 
Gavin Hewitt, Europe editor Article written by Gavin Hewitt Gavin Hewitt Europe editor

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  • rate this
    +1

    Comment number 28.

    10 thesnowman

    "Just back from a month in Greece - to be honest most of the Greeks I spoke to have there head firmly in the sand"
    ==

    Exactly my impression. However, away from the developed spots it was more medieval than 19th century. And I don't mean just the country's physical development but mental outlook and habits of the people. IMO it can't be overcome however much goodwill there is.

  • rate this
    +1

    Comment number 27.

    'She said today that the euro "is more than just a currency, it's the idea of a united Europe". She went on to say that "a united Europe is irreversible". ...'

    We in the UK were never offered a United Europe. That idea was always played down be cause we "know" it to be a really stupid idea. We are only where we are because we have been tricked, deceived and betrayed.

    Never will B irreversible

  • rate this
    -3

    Comment number 26.

    Why, Frau Merkel, do the loans you will be providing Greece at outrageous interest be dictated by some subjective report written by institutions with their own interests in mind?
    If you are going to help, then help all the way. Half measures will only make your previous loans useless, and your bottomless pit will become a self fulfilling prophecy.

  • rate this
    +1

    Comment number 25.

    18"Merkel has somehow become President of the whole shambles."

    Germany is learning the hard way that when you make one or two little mistakes then everything that goes wrong from there on out is your fault.

  • rate this
    +1

    Comment number 24.

    The Greek can will be kicked down the road just as long as the German and French banks have money in Greece. Once the big banks have all of their money out of Greece and Spain and the banking industries of both are totally dependent on the ECB and IMF then the plug will be pulled.
    The losses will then be socialised as the mug EU tax payers will be left with the bill to top up the ECB.

  • Comment number 23.

    All this user's posts have been removed.Why?

  • rate this
    +2

    Comment number 22.

    I guess the real question is:
    Is having one currency worth the Eurozone crisis?

  • rate this
    0

    Comment number 21.

    Best solution - create a Euro 'B' (second Euro) currency for countries like Greece which are struggling to sustain membership.

    Creating a new and temporary Euro can help deflate Greek assets & mean that any bail out assistance will be beneficial to Greece because of Euro A having a stronger exchange rate.

    There are no easy solutions here - the least painful solution, overall, is the best.

  • rate this
    +1

    Comment number 20.

    Germany will continue to support Greece because the Germans have said that they don't want to loose Greece. But what will happen in a few months when Spain needs a bailout and then not long after that Italy and Greece will by then need more money. This will not work Germany cannot and should not hold it all together for no good reason. The EZ would function much better without failing countries

  • rate this
    +4

    Comment number 19.

    It seems the more+more indebted both Germany+Greece become
    the more+more unhappy everybody is

    And this is only the beginning
    Greece is one tiny country

    What about Spain, Italy, Portugal, etc?

    Are Germans, French, etc prepared to bail them out too?

    If anything the Euro seems to be dividing Euro
    more than making it united

    After all who wants to be governed by foreigners?

  • rate this
    -1

    Comment number 18.

    Where are the other EZ members in all this? Merkel has somehow become President of the whole shambles. A representative force of selected EZ accountants should inspect and explain the true horrors of the ludicrous EZ project. Blindly staggering on is bordering on criminal. Every form of misappropriation is being carried out daily. For goodness sake EZ members "Wake up !" Take control.Together

  • rate this
    +1

    Comment number 17.

    "[Merckel] said today that the euro "is more than just a currency, it's the idea of a united Europe". She went on to say that "a united Europe is irreversible""

    Burning building
    No Exits
    Germany quell the fire for now.Open the money spigot.United means if one drowns, all drown.Much too late to back out now.Coulda, woulda, shoulda.Cry me a river Europe!

  • rate this
    +2

    Comment number 16.

    Hewitt: the euro "is more than just a currency, it's the idea of a united Europe"

    The Euro is more than a currency-
    Its the glue that binds the United States of Europe together

    Hewitt: say that "a united Europe is irreversible"

    Sounds like EU has already chosen Europeans' future for them

    Some animals are more equal than others+
    in this case
    EU is more equal then Europeans

  • rate this
    0

    Comment number 15.

    #3 I like your idea. Indeed an Euro zone like the Premier League would function well. Three demoted every year. None promoted!

  • Comment number 14.

    All this user's posts have been removed.Why?

  • rate this
    -1

    Comment number 13.

     
    More BBC repeats? This is worse than the telly, man!

  • rate this
    +5

    Comment number 12.

    Please believe me when I say that Greece cannot repay the money they already owe and borrowing more will make this worse. Come to Greece, see how bad things really are. I don't think people really appreciate the suffering of the Greek people and the collapse of the economy. I fear for the future. Catharsis now - do not prolong the misery.

  • rate this
    +3

    Comment number 11.

    The Greek economy is a basket case indeed, however, Germany will continue to support Greece,and any other from having to leave the Euro. The Euro has been very good for German exports. Don't kid yourself, Germany is just looking after Germany.

  • rate this
    +1

    Comment number 10.

    Just back from a month in Greece - to be honest most of the Greeks I spoke to have there head firmly in the sand. I was dismayed by the arrogance and the anger towards Germany expressed by many Greeks. It came as no suprise to find hardly any Germans on holiday there this year - mind you with Greek sanitation still in the 19th century I had to pinch myself to remember I was still in the EU!

  • rate this
    +2

    Comment number 9.

    Sadly the Greek economy is a long-term basket case. I don't believe German colleagues will keep on bailing out Greece with additional funds - it's financial & politial suicide - with Portugal, Spain & Italy expecting the same treatment.

 

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