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Merkel hails EU deal on Greek financial aid
Photo: DPA

Merkel hails EU deal on Greek financial aid

Published: 26 Mar 2010 11:39 GMT+01:00
Updated: 26 Mar 2010 11:39 GMT+01:00

German Chancellor Angela Merkel on Friday hailed a European deal to support debt-laden Greece, saying it would provide stability for the euro. But the German media said Berlin could pay a high price for its victory.

"I think Europe proved its capacity for action on a major issue, at the same time working to protect euro stability and demonstrating solidarity towards a country in difficulty," Merkel told reporters as she arrived for the second and last day of an EU summit in Brussels.

"For all of us it is important that our common currency... remains stable and that's why yesterday was important for the euro," said Merkel, who helped broker the deal with French President Nicolas Sarkozy.

EU leaders agreed late Thursday, after weeks of negotiations, to come to the aid of Greece with an unprecedented offer of bilateral national loans coupled with help from the International Monetary Fund (IMF).

The deal marked the first time the IMF, the international lender of last resort, has been pulled in to rescue a eurozone nation since the common currency came into being in 1999.

The euro rose slightly early Friday following the EU deal, pulling away from previous 10-month lows against the dollar. The euro was at $1.3339 in early London deals, up from $1.3277 in New York late on Thursday.

The German press on Friday hailed Merkel for winning over other EU leaders to her position on Greece, but said that the victory left behind an unpleasant aftertaste.

"Angela Merkel triumphs, the eurogroup has accepted an emergency plan for Greece on her conditions," Der Spiegel magazine said on its website. Although she has played hardball in Brussels before, "she was always ready to compromise before. But this time she did not bend to the others, she even hardened her position," the weekly said.

"But the price is high: for her EU partners, 'Miss Europa' has turned into 'Frau Nein'. We are threatened by huge damage to our image."

The Handelsblatt business daily said that Merkel's "verve" was reminiscent of former British Prime Minister Margaret Thatcher, but that she had scored a "bitter victory."

Calling her the "iron chancellor" - as Germany's no-nonsense first Chancellor Otto von Bismarck in the 19th century was also known - the paper said Merkel won "but she had to break a lot of china doing so."

There is now "little hope" that Merkel will be able to persuade other leaders to adopt tougher checks on eurozone countries' deficits or that chronic fiscal sinners can be expelled from the 16-nation club, Handelsblatt said.

The Financial Times Deutschland agreed, calling the EU rulebook "obsolete" and saying that changes are so important "that they cannot be buried in a working group."

"The compromise means the Greek patient is out of danger for the time being," the FTD said. "But the undeniable result is that someone else is now in intensive care: the currency union as a whole."

The Frankfurter Rundschau, meanwhile, said that Merkel's "biggest mistake" had been to listen to people "who never liked the euro" and political opinion polls.

"If the German chancellor ... is calling on the IMF, then she is betraying the European idea, the European project ... If the IMF is the solution, then the European project is finished."

AFP/The Local (news@thelocal.de)

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Your comments about this article

14:43 March 26, 2010 by Prufrock2010
Where's peschvogel now that we need him to explain yet again how IMF intervention is impossible?
15:59 March 26, 2010 by Der Grenadier aus Aachen
No doubt he's off being pedantic in his handbag-knitting group.
16:47 March 26, 2010 by peschvogel
IMF is indeed invloved however, the geld will "all" come from EU states.

The IMF is taking more of a budgetary & supervisory role. Spain, Portugal are delighted at this news....
07:08 March 27, 2010 by Prufrock2010
Nice try, peschvogel. Sounds like you flunked out of the George Orwell "double unspeak" school of political spin. Shall we assemble a compendium of your direct quotes from other threads in which you pontificate in no uncertain terms about how IMF intervention or involvement is illegal, unconstitutional and could never, ever happen? Amazing how people who talk through their nether orifice can never admit they are wrong.
09:30 March 27, 2010 by William Thirteen
well to be generous, incoherent babble cannot ever actually be right or wrong....
16:55 March 27, 2010 by peschvogel
Well, to the delight of the German taxpayer in late April, they wont be disappointed by the "new structure" of money leaving Germany and going to Greece for free. And Spain & Portugal are extremelly delighted to hear the news that there is money to help them as well. And more German bank bailouts coming to a landesbank near you.. Schade...
17:45 March 29, 2010 by Hibernicus
What hypocrisy!

On the one hand Merkel is lecturing the Greeks on reducing

their debt while her Defence Minister is pressing Greece to

buy large quantities of tanks, fighter jets and other weapons from Germany thus creating more debt! And no money is

going to Greece, just promises to back up Greece's sovereign debt if required. None of them can afford to renege on this; if they did the Eurozone would collapse. Capitalist "finance"

has been exposed as the three-card-trick it is yet, some people continue to be fooled by it.
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