Greece: Merkel's euro headache returns

German Chancellor Angela Merkel speaks at a youth union convention in Rostock, 5 October  It will be Angela Merkel's first visit since the bailouts

The moment will be watched closely. On Tuesday the German Chancellor, Angela Merkel, will visit Athens. It will be her first visit to Greece since the crisis erupted nearly three years ago.

She is regarded by many Greeks as the author of austerity. She is held responsible for demanding that Greece make swingeing cuts in exchange for the two bailouts it has received. The German flag has been burnt at demonstrations and one paper has dressed Angela Merkel in a Nazi uniform.

The visit will spark protests. The Prime Minister, Antonis Samaras, says "we will receive her as befits the leader of a great power and friendly country".

The unions see it differently. They have called demonstrations against what they call the "neo-liberal policies of Mrs Merkel and the EU's core leadership". The radical leftist party Syriza is planning a rally against the visit. A right-wing party intends to go to the German embassy to protest the "transformation of our country into a German protectorate".

The meeting is a gamble. If there is chaos it will only underline for the German public that Greece is a lost cause. Angela Merkel, however, is making a calculation. She is signalling that she wants Greece to stay in the eurozone. She has silenced German politicians who in early summer were saying a Greek exit held no fears for them.

"This is symbolically very important," says Carsten Brzeski, senior European economist at ING. "It points clearly to the fact that Merkel is not going to drop Greece, even though things are not going well for them."

Talks between the Greek goverment and the so-called troika - debt inspectors from the EU, IMF and ECB - are continuing. Greece has to find 13bn euros (£10.5bn; $17bn) in savings to qualify for a 31bn loan.

The Greek finance minister says "there are differences that have not been settled". Without the loan Greece will run out of money by the end of November.

Today the troika will be in Luxembourg for the meeting of eurozone finance ministers. They will deliver an update. The crucial decisions lie ahead, probably later in October. Chancellor Merkel's instinct is for a fudge. But here's the problem. Greece's public debt is 346bn euros, 179% of GDP. It is heading into the sixth year of recession. There is no way it can reach the targets set for it.

Sooner or later the big questions will have to be answered. Does Greece need a further restructuring of its debt as the IMF is hinting, or even a third bailout?

In the meantime the Greek prime minister is warning that conditions in Greece are similar to those in the Weimar Republic in Germany in the 1930s. Plenty for Chancellor Merkel to think about.

Gavin Hewitt Article written by Gavin Hewitt Gavin Hewitt Europe editor

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  • rate this

    Comment number 150.


    Initially all of us come from PanGaia.

    And in the long run all of us are dead.

    I believe that You belong to the sociological group called "WASPS",
    at least Your vocabulary and Your political convictions point in this direction.

    No problem with that.

    Except for dialogs with You I will still use the "continent" as political shorthand for : the EU minus Britain .

  • rate this

    Comment number 149.

    John - it is the interference of the EU I fear and their determination to create a homogenised federal state that will do more to destroy our national customs than anything form the new world or asia. I also do not accept that it is only the EU or the Euro that prevents war in Europe. Again I fear the Euro austerity is more likely to cause it!

  • rate this

    Comment number 148.

    #137, Angela: Many Greeks know what is wrong in Greece, but do not like being demonised by people like you, who blame them for everything without even knowing basic and well-documented facts (German loans, ancient Greek identity).
    #140quietoaktree: I had underestimated the reasons behind your personal grudge at Greece. But the Guardian link (a 2003 article, pure memory, sure...) alerted me... .

  • rate this

    Comment number 147.

    134. Xenologist
    No-one wants overcrowding. Perhaps if the advanced capitalist countries (you refer to them as allies) weren't too busy draining the resources of developing countries there would be some balance. You can't expect cheap goods due to conditions that are imposed in developing countries and not expect economic migrants to exist. In other words, you can't have your cake and eat it.

  • rate this

    Comment number 146.

    Danaos: "Note how 3 out of 4 oldest ethnic groups in Europe are E.European/Slavic. This needs quite some explanation."

    That's true that Serbs used to live in present day NE Germany, while ancient settlements of people known today as Poles (they were known as Lachs then) were discovered by archeologists in the area of present day Berlin.

    Not that it changes the present situation a bit.

  • rate this

    Comment number 145.

    136. The Great Oog

    None published pictures of ancient monuments giving the finger to Irish or Icelanders. None published lies of them being lazy. The press, German, Dutch and British (OECD 1420, 1450, 1740 hrs/yr) filled the minds of people with lies about ''lazy Greeks'' (OECD 2100hrs/yr).

    It was not Greeks that started with insults. Relax-Rewind. Do not give life-extension to idiocies.

  • rate this

    Comment number 144.

    It is very sad for me to see Gavin articles on the EU and lot of the comments you consider the EU as a Foreign entity which is not the idea of the EU come to stop the repetition of the horror of the war in Europe and a united Europe to protect our heritage traditions our way of life from the interference of the new let us be one Nation with one vision one aim Peace and to be European.

  • rate this

    Comment number 143.

    Siryza offered a choice: stuff the lenders and we'll stand on our own! By not voting for Siryza, they made a choice to stick by th austerity program and pay back what they owed.

    All elections have consequences, even Greek ones.

  • rate this

    Comment number 142.

    133. Danaos
    They have not entered with weapons. They are not like the Greek troops stationed in Afghanistan assisting with the illegal occupation of the country, and aiding conditions that contribute directly to this influx of immigrants Greece is experiencing.

  • rate this

    Comment number 141.

    #131, Angela: German reparations to Greece were hardly ever paid back, and that is why the German government often say that this is a an issue of the past, etc. Otherwise they would come out and say that they have already paid back. What about the 1943 loan, when was that paid back?
    German media and politicians must be biased against Turks because their account is completely different to yours...

  • rate this

    Comment number 140.

    #127 Danaos

    "Your point was?"

    -- 2 million cars uninsured !

    #100 and #117

    -- it still stands--bravely --in spite of futile Greek onslaughts.

  • rate this

    Comment number 139.

    austriacus to pmk: "By the way, where did Your ancestors stem from?"

    Initially, as all others, from present day Ethiopia and Kenya.

    But, will it make you happy if I say that one of my direct ancestors helped to defeat Ottomans in Vienna Battle?

    [If John III Sobieski's army failed in that endeavour, in all likelihood you'd be speaking Turkish, not German, as you native language.]

  • rate this

    Comment number 138.

    128. powermeerkat

    ''Poles and Bohemians obviously not being Europeans, right? ;-)''

    Polish enter visibly around 950 AD so I indeed missed missed 50 years for which I do apologize (and note there is no irony in this comment, I hold Polish in great respect for their history and culture). Note how 3 out of 4 oldest ethnic groups in Europe are E.European/Slavic. This needs quite some explanation.

  • rate this

    Comment number 137.

    we all know of the problems of our respective countries and their politicians, folk etc. But none of us says we are the best like the greeks do (Ok except me) If someone goes on shouting from the rooftops that I am the greatest, I am innocent,I was always paying what was due, it is your(everybody elses) fault, you owe me. Then this someone will be judged differently and much more stricktly.

  • rate this

    Comment number 136.

    The Irish backed their banks. They chose pain; but are digging out, heads held high.

    The Icelanders let them collapse and prosecuted the bankers. They chose pain too, but also digging out, heads held high.

    The Greeks take money, want more while insulting their lenders.

    The Greeks chose to take the money, then insult

  • rate this

    Comment number 135.

    @ 129.

    No, not at all: "Schadenfreude" means to feel joy about someones MISFORTUNE. Like the bad guy slips and gets his face into a cake.

  • rate this

    Comment number 134.

    126. Anarchist_Communist: You downplay the issue legal vs. illegal entrance but (1) a country needs to know how many and who enter (btw, immigrants to US had to undergo short-term quarantine for medical checks) (2) a country must be able to curb immigration when it gets out of control (3) the US was and is huge in contrast to Greece, i.e downtown Athens... No European country can stand this flow

  • rate this

    Comment number 133.

    125. Angela

    I see....
    What are you then? You come here to swear vulgarly against Greeks while you hide your own ethnic origins? How about that?

    You suffer from an obvious complex of inferiority against Greeks. Tell us about you then

    126. Anarchist_Communism
    ''Regardless of how they entered the country they were both economic migrants''

    Not the same. An immigrants enters. An invader invades.

  • rate this

    Comment number 132.

    Re #80 [Merkel]"doesn't want to run the risk of destroying the "work" of Kohl, her political mentor and boss. Kohl's ultimate goal was the single European superstate and Merkel will continue to pursue that goal."

    W. Germany didn't get much for billions Kohl pumped into DDR.

    And because of that huge assistancce many Wessies still resent him for it. While many Ossies still resent Wessies.

  • rate this

    Comment number 131.

    The 2nd generation Turks (why Turks?) are in the Parliament (not a single Greek there, I guess Germany coudl not afford their huge salaries) and local governments , have TV shows, play football etc. and in general participate in all ways of German (and not only) life.
    The war reparations were payed in full and more. Don't believe me, google and find the treaties and agreements and payments


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