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Merkel pledges eurozone stability to Greece

AFP/The Local · 22 Mar 2010, 10:20

Published: 22 Mar 2010 08:09 GMT+01:00
Updated: 22 Mar 2010 10:20 GMT+01:00

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Merkel told Papandreou in a phone conversation on Sunday that the "EU was determined to undertake everything necessary to preserve the stability of the eurozone," a statement said.

Merkel also "confirmed her support for Greek reforms," while Papandreou "underlined that Greece did not need financial aid," the statement added.

Greece has called on its European partners to put together a contingency plan in case it has difficulty refinancing its debt, but German officials including Merkel have recently indicated that Athens should consider borrowing money from the International Monetary Fund.

In an interview with German business daily Handelsblatt on Monday, EU Commission chief Jose Manuel Barroso called on Germany to commit to the EU plan.

"It is in the interest of Germany to ensure the stability of the European monetary union. I am therefore certain that Germany will make a constructive contribution to resolving the current crisis," said Barroso.

But a poll published by the Financial Times on Monday showed 61 percent of Germans are opposed to the idea of their government helping Greece out of its debt crisis.

Only 20 percent of Germans are in favour of any aid to Greece but the heavily indebted country gets more support in fellow eurozone states Spain and Italy, where 45 percent and 40 percent back the idea.

The survey also showed deep opposition in Britain - which is not part of the euro currency area - where 56 percent are opposed to Greek aid while 21 percent support it.

On Saturday, Papandreou called upon EU leaders to back the plan when they meet in Brussels this Thursday and Friday to help calm the markets which have made it difficult for Greece to refinance this year some €50 billion of its more than €300 billion in debt.

"We are not demanding that anyone pay for our mistakes and our debts... but we are asking for political support against speculators and the chance to borrow at rates that allow us to breathe," said the prime minister.

But in a radio interview on Sunday Merkel indicated she opposes EU leaders making a decision at their summit this week as Greece doesn't need money at the moment.

"That's why I advise against causing turbulence on the markets by raising false expectations about the European Council meeting this Thursday," she said.

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In the radio interview Merkel said Germany would not oppose the EU plan, whereby willing EU member states would make loans to Greece on a bilateral basis to get around EU law that prohibits a bailout.

But she also noted Greece could go to the IMF for help, an idea previously anathema to the 16 countries which use the euro as it would signal they could not properly manage their monetary union.

Finance Minister Wolfgang Schäuble also said Sunday that Greece doesn't need help for the moment, and that under that under the EU's stability pact "Greece should resolve the problem itself."

Athens has put into place plans to hike taxes and slash spending which have been "well received" on the markets, Schäuble said on ZDF television.

AFP/The Local (news@thelocal.de)

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Your comments about this article

08:38 March 22, 2010 by Fatz Lewinski
"You vill get nuzzing von us unless you buy more zubmarines!" Saw thes article in the FT yesterday:


Greece has been refusing to pay for a dodgy German sub.

Yesterday they solved that dilemma, bought two more, allowed Thyssen to sell a Greek shipyard (deal brokered by Mr.Papandreou's brother.)

Not sure if the subs inluded a 6 speaker sound system with CD changer and sub woofer.
09:41 March 22, 2010 by Deutschguy
No problem with "asking" Greece to buy German products, if they expect German support to pay for their reckless ways. Buying German products employs Germans, who in turn pay taxes. That gives Germany revenue and motivation to help an EU member.

That said, any loans/ guarantees/ structural assistance needs to come with strong demands for reform in Greece. Monitoring with the ability to level sanctions and to withdraw aid if Greece does not reform, especially its government employee sector, is critical to Greece's future success and to EU credibility.

Merkel is doing the right thing. Please, please don't let the IMF get its Big Corporate, Big Bank nose in the EU financial tent. They have a horrible track record and will pursue US corporate banking interests, which indirectly, is punishing or dismantling the Euro and a more integrated Eurozone.
10:59 March 22, 2010 by Fruitkok
Yeah new naval vessels is priority #1? Isn't over-spending on military equipment one of the big reasons for Greek problems. They'd better make peace with Turkey on Cyprus and take a more flexible position on Macedonia. And spend the money on smaller boats to keep the immigrants in Africa.

No money to Greece. Let them beg at the IMF.
11:05 March 22, 2010 by Frenemy
I could make a very cynical/inflammatory comment about the symbiotic relationship between the corporate banking, the IMF, and the United States, but I think I'll refrain.

(because I know all the defend-"American pride"-no-matter-what Eagle Scouts on here will go into a frenzy and eventually turn this thread into a pseudo-intellectual Europe vs America flamewar...)
12:44 March 22, 2010 by pascha
I don't know why this article makes Germany out to be some kind of victim. publications like Focus started the slanging match in the first places by insulting Greece's antique culture in pretty grand Sun newspaper style. it might have seemed funny but it certainly was the wrong time to exert their freedom of the press rights (such rights come with responsibility I might add).

also Germany is pretty much lone voice in blocking Greek aid - so much for European unity. its pretty sad were failing at this, at its heart its a great idea.
13:04 March 22, 2010 by William Thirteen
Merkel & Co. are playing a delicate game - one side of the mouth ensuring support in Greek's struggle with heartless 'speculators' (cue Snidely Whiplash photo) to prevent Greek default and Eurozone meltdown, while out the other side grumbling 'no bailout, go see the IMF' in order keep the EurUsd rate down enough to please German exporters. So far so good I'd say..unless you're one of those injured in the grecian streetclashes....
15:20 March 22, 2010 by Eagle1
11:05 March 22, 2010 by Frenemy

"I could make a very cynical/inflammatory comment about the symbiotic relationship between the corporate banking, the IMF, and the United States, but I think I'll refrain."

Translation: I think that I'll comment while saying that I won't comment.

I love anti-American conspiracy theories. Is that the same America that rebuilt Europe 60 years ago, twice sent its soldiers to Europe to die in major wars created by Europeans, and prevented the USSR from turning all of Europe into a communist vacation zone? Those who do not like the way the IMF is run are welcome to try and find money elsewhere. Good luck with that.
15:54 March 22, 2010 by Fatz Lewinski

True, all true but then one reples with "how about the US dragging or at least trying to grag the world into Korea, Vietnam, Afghanistan, Iraq." and then don't forget the French dying to bring independance to the USA, or ... The nice thing about history is that it is full of examples of politics working for or against any one pov.

The comment from Deutschguy on the IMF is not entirely untrue and the motives of those involved are as contemptable as Merkel selling submarines.

The Greek issue is just going to be a bump in a very long and so far, fairly successful project: The Euro.
20:05 March 22, 2010 by Prufrock2010

I am an American and I agree with your comment. Not all Americans are parochial nationalists.
22:30 March 23, 2010 by peschvogel
The IMF cant be used because of two major reasons:

1. The growth problems are due to the EMU and the other members

2. There is a "native currency" clause that any monetary union must handle their own problems and only "native currencies" can be helped.

Hoch stuer...
22:38 March 23, 2010 by Prufrock2010
If you are correct, which I seriously doubt, Greece is in deep trouble, isn't it?
01:34 March 24, 2010 by peschvogel
No, they will be bailed out by Euro members. Greece cant get kicked out.
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