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EU heavyweights push Merkel to aid Greece

AFP · 22 Mar 2010, 18:43

Published: 22 Mar 2010 18:43 GMT+01:00

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The European Commission, the EU's current Spanish chair, France and Italy each urged Merkel to nail down aid for Greece at a summit this week and warned that her resistance may feed market attacks on the euro.

Greek Deputy Prime Minister Theodoros Pangalos went further - accusing Germany of betting on rising Greek bond yields and cheaper exports for its industry.

"In speculating against the bonds of your partner and friend, and in allowing monetary and credit institutions to take part in this miserable game, people in Germany are making money," Pangalos said.

"While the countries of southern Europe suffer from the fall of the euro, German exports gain from its weakness," he added.

Commission chief Jose Manuel Barroso led the Brussels assault as a new poll showed the stakes rising in the Greek debt crisis with 61 percent of Germans opposed to a bailout and 40 percent even wanting Berlin to quit the euro.

"We need a decision at this summit so that we know how we are going to manage the Greek crisis," Barroso told German daily Handelsblatt.

Warning of "deep uncertainty," he stressed: "We can't keep going this way, we risk endangering the stability of the eurozone and feeding (market) speculation."

The euro fell to a three-week low of $1.3496 on Monday, while the interest rate demanded by investors to hold Greek debt rose sharply to more than 6.5 percent.

Merkel has said that "raising false expectations" of any deal at the summit - even without pressing the button on hard cash loans - would itself cause "turbulence" on markets.

"The point is that on Thursday and Friday - and it is important that markets know what can be expected and what should not be expected - it is not about aid to Greece," Merkel told reporters after a meeting with European Parliament head Jerzy Buzek on Monday.

"Greece has not asked us for money. That means that there is no question of an urgent decision in the European Council about aid for Greece," she said.

Widespread unease among German taxpayers could be seen in the Financial Times poll showing a hardening of opposition ahead of a key regional election on May 9.

Greek Prime Minister George Papandreou has warned that his government might be forced to turn to the International Monetary Fund.

Buried under debts of €300 billion, he has already ordered billions of euros of savings in seeking to slash a runaway public deficit that is close to 13 percent of national output - more than four times the limit allowed by the eurozone. But loans at lower rates and totalling €22 billion are still being sought from eurozone partners, with IMF top-ups, a European source said.

Spain's foreign minister said Thursday and Friday's summit was a defining moment.

France said "new ideas" were required to close a yawning gap between the willingness of some eurozone partners to cough up and the need as expressed by Italy to ensure full solidarity.

"We have to support Greece," French Foreign Minister Bernard Kouchner underlined.

Italian counterpart Franco Frattini said there was a "moral duty to intervene as soon as possible."

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Athens has officially only asked for help to fend off financial speculators, as it seeks to refinance more than €50 billion ($68 billion) of debt this year, including more than 20 billion by the end of May.

Greece is currently paying roughly twice the interest that Germany does to borrow money.

Barroso's spokewoman stressed that her boss was doing "everything possible" to secure a deal this week, and that he remained "hopeful." Berlin also faces a possible constitutional court challenge should its federal institutions engage in any bailout.

Meanwhile, German news magazine Der Spiegel reported a domestic "power struggle," pitting Merkel against Finance Minister Wolfgang Schäuble, was "weakening Merkel's position in Brussels."

Merkel is often lampooned in Germany for indecision, but Der Spiegel said she was acting with a "resolve reminiscent of (Margaret) Thatcher," the former British prime minister who secured a multi-billion-pound rebate for London in lieu of bumper EU aid to French farmers.

"The role of the Iron Lady won't make her more popular in Brussels, but back home it will," it added.

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Your comments about this article

19:52 March 22, 2010 by Celeon
"France said "new ideas" were required to close a yawning gap between the willingness of some eurozone partners to cough up and the need as expressed by Italy to ensure full solidarity."

A have a new and radical idea !

Instead of Germany paying the lion share for financing the correction of greece's fincancial failures , France and Italy pay that share 50/50 and Germany just pays what French and Italy would pay now.

I bet if things would be like that France and Italy would suddenly say "Hey Greece,...you know...maybe its really better you ask the IMF for money ?"

Maybe France and Italy would volunteer to do so? You know, because of that "moral responsibility" they feel so strongly? When hell freezes maybe.

Even if Merkel gives in to the pressure, its rather questionable wether the german constitution does even allow to contribute to that bailout. Propably not.

Even if she says yes, the constitutional court may say no. The german voter already says no.

Maybe then im going to see France and Italy bailing Greece out with the hundreds of billions their tax payers have earned in the last years. Im sure the average french and italian tax payer will fully support that .... until the next election :-D
20:06 March 22, 2010 by peschvogel
The IMF can't "contitutionally" be used because of "native currency" clauses. Germany will have to help out Greece. The "talk" between all EU members personally reminds me of kindergarden however, they have "talked" down spreads. That was their objective. Now the fun starts. Germany must bailout Greece. However, they could also seek currency reform with the bailout. Spain will be next with cap-in-hand.
21:06 March 22, 2010 by Eagle1
"EU Heavyweights" - France, Italy, and Spain

BAH! Only if it's a cooking competition.
21:40 March 22, 2010 by Feliks
It is a big Mistake if Germany will help Greece with money, because Greece is turned into a swamp that sucks in everybody.
22:58 March 22, 2010 by mrsams
Germany is very open when it comes on helping other nations that are in need but because of nonsense blaming of their "bad fate" to germany .......................

"In the past, Germany was always prepared to contribute a few billions, if necessary, to promote European unity. This logic no longer applies. Germany is rethinking its financial assistance to other euro countries, particularly when the debtor nations are openly blaming Germany for their problems."


23:37 March 22, 2010 by Logic Guy
Well, it must say that I fully agree with mrsams.

Don't blame someone for past problems and yet at the same time ask them to save your country.

I'm sure that all rational people, regardless of where they live, would like to see Greece and other financially troubled nations recover.

The IMF is neutral. And it's an extraordianry concept, when it is implimented properly. The IMF has helped many nations. And I beleive that it should assist Greece as well.
02:09 March 23, 2010 by Thames
Away with the Euro! Bring back the Mark!

The UK was right on this one.
11:03 March 23, 2010 by peter douglas
This guys take Germans for suckers or what,we don,t sip wine for breakfast we shop at discounter stores and save a lot and try to live within our means.i would rather my tax was used to increase the amount given to Hartz 4 kids other than corrupt Greeks.Viva Angela.
11:12 March 23, 2010 by vjörn
Salute to Germany!
11:56 March 23, 2010 by kaliopla
Hello, I am a Greek citizen and I understand all of you. In your place I would probably think and say the same things even if the average middle income citizen in Greece is not like the average public Greek officer in Greece, we in the private sector are working 8 to 10 hours per day and do not sit all day long at the cafeterias just because the days here are sunny.

However the whole system here favors all kinds of corruption because our politicians want all Greeks to be able to pay them (the politicians ) illegally in order to do their work, or exchange our votes with a secure job offer to the public for one's daughter or son.

Something I cannot understand is the following : I hear at the news all day and all night that we are not asking for money support only for political support so that Greece can get loans at a normal rate, so why Germany does not want to offer this political support? It is like saying this : I want that you give me this product A and you do not want to give me the product B, ok but who has asked from you the product B ? What is this kind of game?
12:50 March 23, 2010 by Fruitkok
The EU is just another system for the North to pay for the South. It's Merkel's duty to finally say what all her voters say and that is: it's enough. Whether it is through the UN, through developmental aid, through the EU or through all other bureaucratic systems that exist, all wealth earned by hard working people like school teachers, firefighters or blue collar workers goes to the South through undemocratic systems that all voters want to have removed but have no power over to do so. The German people say NO so it should be NO. The Greeks ruined themselves, the best way to solve this is by the IMF. And to call this a shame for the EU is just ridiculous. Scandinavia, Germany and Holland are in this sjit together.
13:03 March 23, 2010 by kaliopla
yes, but how many times will we say it : We did not ask for money from the German citizens, my God !! Wake up this all is coming from media games !!

You must know also something else, Greece imports so many things from Germany and makes a huge turnover to German companies, I work in one such company which has made a huge turnover in favor of this German company. Ok would Germany prefer Greece had its own factories and competitive companies here and imported nothing from Germany?
16:05 March 23, 2010 by magdelana
Greece is trying to be a fox but is more like a rodent. Germany is 80 billion in debt and wants to borrow billions more banking on an uncertain future. There is no rational reason to walk out on a plank for Greece. Politicians trowing the bull is something people can see through by now.
17:03 March 23, 2010 by peschvogel
Feliks: You need to take your medicine and stay at home. No contact with society until you stop having these suicidal thoughts. Aus!

Look, these leaders in Europe are soft. I will take Schmidt, Mitterand, Thatcher anyday over these softies. Merkel and her clown crew look ridiculous making 5 different statements from 5 members of government. Nobody has control over there. Act as one, with one voice and make "one" statement.

This is all just "talk" anyway. The IMF cant be used. The "talk" you are seeing is to talk down spreads for Greece. Then Germany, along with the EU will have to bail out Greece. 3rd week in April. Thats when it will get "done". Then the torching of cars in Berlin can resume.

Germany "has" to bailout Greece. There is noo other way around this story. All of the EU members have agreed and they are awaiting for Berlin to stop their fighting like cats and dogs and come out and say, fine. 1. You cant use the IMF. 2. Germany has to bailout Greece because it will start a firecracker 3. Moral hazard will happen because Spain needs money also 4. Trade wars will resume if Germany doesnt help and Greece is left alone to die. 5. The Euro will be demolished.

The coming bailout is the only "solution". It must be done. It must be done along with Germany. Now, can the European kindergarden all hold hands? Schlim.

Feliks - take your meds!
21:48 March 23, 2010 by Prufrock2010
Ignorance is bliss, blackbird. You must be serenely happy.
21:54 March 23, 2010 by peschvogel
Okay, Prufrock2010...Other than making a noble effort to write something intelligent, your point would be? Ah, I see, you have none. You just wanted to add some "analysis" by stating a black bird cant be happy. Good addage and thanks for the input. Nobody cares!
22:20 March 23, 2010 by Prufrock2010
Apparently you care, or you wouldn't have responded. By the way, my comment was quite the opposite: I suspect that the blackbird in question must be deliriously happy in its ignorance.
00:23 March 24, 2010 by peschvogel
If a man screams in the forest......evidently someone does hear him...unlike the "falling tree". PruCock2010: Your words are falling on deaf ears and should at once stop. Do i make myself clear? Du nicht verstehen? Fine.
00:52 March 24, 2010 by Prufrock2010
There's an old expression in Texas: "Never bring a knife to a gunfight." Another metaphor that I suspect is lost on you.
01:16 March 24, 2010 by peschvogel
Liars cause trouble...

A liar needs a good memory.

Figures never lie, but liars can figure.

I deal with facts not with liars...
02:10 March 24, 2010 by Prufrock2010
You don't deal with facts. You deal exclusively with adolescent fantasy which makes it impossible to maintain a rational discussion with you. You deal with inflammatory name-calling and crackhead fiction. But you are amusing in a perverse way, and so easy to debunk that it's fun to have you around.
04:45 March 24, 2010 by peschvogel
What facts would you like for me to tell that backs up everything i have previously mentined? Do we need to get into the pseudo - intelligent debate?
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