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Germany reluctant to rescue Greece

AFP · 23 Mar 2010, 17:01

Published: 23 Mar 2010 17:01 GMT+01:00

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Despite efforts by the European Commission to push national leaders to agree on rescue plans this week, France also softened its position in recognition of deepening divisions in Europe on the crisis.

Commission chief Jose Manuel Barroso said European "solidarity" with Greece would help stabilise the eurozone, in remarks to the

However, Germany, Europe's economic powerhouse, argues that rescuing Greece now would take away the incentive for the Greek government to enact reforms to cut its huge budget deficit.

German Foreign Minister Guido Westerwelle said Germany was "very reticent" to work on plans to help Greece, observing that such plans might not be necessary.

Speaking on German radio, he said that money "hasn't been asked for and I have the impression that the Greek side knows that it must push its reforms forward."

But Barroso said German Chancellor Angela Merkel, as a "committed European," will, "if needed, be in favour of providing financial assistance."

Analysts warned that the uncertainty over Greece in the run-up to the EU summit on Thursday and Friday would depress the euro further, with Stuart Bennett, an analyst at French bank Credit Agricole CIB, arguing that "the market is positioning for the worst."

France, Italy and Spain have all called for quick joint action by Europe to fix to the Greek debt crisis.

"The French position is very clear," French Foreign Minister Bernard Kouchner said on Monday. "We cannot, we must not abandon our Greek friends."

However, a French government source said on Tuesday that Paris was softening opposition to bringing in the International Monetary Fund as part of a wider rescue act.

"Different views" in Europe will "doubtless come together somewhere in the middle," the source said.

Paris is also bending over backwards to accommodate Merkel's hardline stance, saying "we have a little time" with which to resolve the issue, and even allowed for "debate" on Berlin's demand that countries that consistently fail to balance their books could, ultimately, be kicked out of the eurozone.

The political posturing has not impressed markets, with Marco Annunziata, chief economist at Italy's UniCredit Group, saying eurozone partners are behaving "like teammates in a sack race."

He said they "have to run while keeping one leg each in the same sack: either they coordinate their actions, or they will fall hard together."

A senior US Federal Reserve official has warned that the Greek crisis could directly affect the US economy by hitting American exports because of lower eurozone growth as a result of adjustments to rescue Greece.

Atlanta Federal Reserve regional chief Dennis Lockhart also said that the crisis could lead to a broad shock for financial markets which "could play out in the banking system or in the form of a general retreat from sovereign debt."

Greek Prime Minister George Papandreou says his country faces the prospect of bankruptcy without some form of support, particularly to reduce the interest rate if the country is forced to pay to borrow money on international debt markets.

The yield - or interest rate - on Greek government 10-year bonds rose to 6.446 percent on Monday but had eased to 6.341 percent by Tuesday morning.

Story continues below…

Greece has the highest deficit in the eurozone - estimated at 12.7 percent of output in 2009 - and risks a financial crunch as it needs to raise some €20 billion for debt redemptions due by the end of May.

Analysts at French bank BNP Paribas meanwhile said the Greek government faced a key "deadline" next month because of a steep increase in funding needs to repay old debts.

"Greece remains fully funded until the end of March, but not until the end of April," they said in a note based on the bank's own calculations.

"Greece needs at least €3 billion more" by the end of April, with its first debt redemption due on April 13, they added.

They said the "deadline to the whole Greek story" lay between April 13 and April 23.

Meanwhile French and Swiss banks are heavily exposed in Greece.

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Your comments about this article

18:48 March 23, 2010 by Prufrock2010
This is probably the first time I ever agreed with Westerwelle about anything.
19:44 March 23, 2010 by Edmond Schindler
Make 'em sweat bullets over their debt problems, at least one bullet for every nasty statement made against Germany since this started up.

...crawling on their knees with flowers and candy and promises to do better following meek apologies with a contrite attitude to match. Then barter for their first born child from every young couple under 30 to offset Germany's population shrinkage...must I go on? I think not.

Basically, I don't want them to have one red cent from my tax money, and the sooner they and Spain along with Italy are out of the EU the stronger we will become.

Sink or swim, but don't climb on my back to keep from drowning...

Bumper sticker: "Cash, Grass or Gas, nobody rides for free!"
20:06 March 23, 2010 by peschvogel
This is the type of Hubris that will come back to you. Spain is next....
21:56 March 23, 2010 by Prufrock2010
Hubris is more than a Greek word; it is the Greek attitude. Where ancient Greece excelled in philosophy it ignored ethics. Nothing has changed in the intervening centuries. Karma's a biatch, ain't it?

Flame away, blackbird.
21:59 March 23, 2010 by peschvogel
Well, one thing i will agree with you is Karma. Its a law that people fail to underestimate. It will come back to you all the time, 100% of the time.

However, not helping Greece out or helping Greece out becomes moral hazard...

Greece has the right cards for this match...Late april should be the death blow...
22:41 March 23, 2010 by wxman
Edmond Schindler, you forgot the most important one on the bumper sticker male hippies had on their VW van back in the 60s/70s. It rhymed with gas but began with "a". Many female hitchhikers had no cash or dope, but they always traveled with their - - well, you know.
22:47 March 23, 2010 by Prufrock2010
Well, blackbird, by your calculation Greece should be reintroducing the drachma sometime in May. That would be welcome news.
23:07 March 23, 2010 by peschvogel
No, Germany will be "re-introducing" the DM....Shocker, right? Believe it!

You cant kick Greece out of the Euro because if you do that according to Maastericht agreements, you then must kick Greece out of the EU and thats impossible. The IMF cant be used either...
23:36 March 23, 2010 by Frenemy
"The IMF cant be used either... "

Well that depends on your definition of "used"...
23:46 March 23, 2010 by peschvogel
The IMF cannot be allowe to engage Greece if they cant meet their debt obligations. Let that be clear. There is no "loose" term of the world "used". It simply cannot be done in this case because of the reasons outlined above. You cant fit a circle into a square. It must be done on the EU/Eurozone level.
00:27 March 24, 2010 by vjörn
Have a break, have a kitkat.....so far so good here.
00:45 March 24, 2010 by Prufrock2010
Somehow I don't think this issue would be so incendiary had Greece not brought the crisis upon itself by means of its fraud and corruption. Had Greece fallen victim to circumstances outside its control, I suspect that Germany and the rest of the EU would be more inclined to help out. However, it is difficult to reward the wrongdoer for its deliberate wrongdoing, not to mention that it is political suicide.
00:51 March 24, 2010 by peschvogel
Still pointing the finger...Typisch...Ungloublisch...What will you do when German taxpayer money goes to Greece soon? Put a gun to your head? That would help us all here at thelocal.de.
01:02 March 24, 2010 by Prufrock2010
I think I'll let the other contributors weigh the merits of our respective contributions, thank you very much.
01:07 March 24, 2010 by baltog
Deutschguy....Personaly my profession is brain surgery..I return at home every day at 11pm...I dont know your profession,,I;m not in riots because Idont have the time...I would like a extra salary but isn't so important to me! If YOU the german taxpayer you have the gentillesse to give me some more money I can sent you my accound...allways the "help" of the big nations like YOU is wellcome...anyway I have to change my boat for this summer..the weather in Aegean oblige me to buy a bigger one!!
01:48 March 24, 2010 by peschvogel
Germany will "have" to bail out Greece. Expect that annoucment 3rd week of April...
01:53 March 24, 2010 by Prufrock2010
"Germany will "have" to bail out Greece. Expect that annoucment [sic] 3rd week of April... "

I want some of whatever you're smoking. Then again, maybe not.
02:09 March 24, 2010 by peschvogel
Look, I dont smoke. Greece needs aid. The IMF cannot be used because of what i mentioned above. Greece cant get kicked out of the Euro unless they get kicked out of the EU. Euro members are bailing out Greece 3rd week of April because Greece has to make payments on its debt that time. The "talk" you are hearing now is BS. Its just a "stage" by leaders to talk down spreads. The May elections Will be impacted by this decision. Then currency reform talks (that are underway) will discuss the DM. Thats the way its going down.
02:29 March 24, 2010 by Prufrock2010
If it's a choice between protecting the euro and bailing out Greece, Greece loses. Nobody in Europe gives a rat's @ss about Greece except the corrupt Greeks. Neither Germany nor the rest of the EU is prepared to bail out the rest of the PIIGS if the Greek blackmail succeeds. Greece corruption has put the entire European Union on the brink and has threatened the euro. To reward Greece for this would be the death knell of whatever economic stability remains in Europe. Greece needs to be expelled from the euro zone and go back to goat herding. Greece has been irrelevant for 2000 years, and should be relegated to its rightful position in the third world. Europe cannot afford to be destabilized by Greek corruption. Probably even Socrates would agree with that assessment.
02:39 March 24, 2010 by peschvogel
Look, you can cry, kick and whine all you want but fact is...Greece is going to receive money from the EU. Spain will be next... I am amuzed at your persistance however, I dont think your words were received on the other side of the Alps. I presume you will be marching with a flag in late April denouncing the NWO, kapitalismus and to stop wearing fur?
02:42 March 24, 2010 by Prufrock2010
Don't bet on it, blackbird. Frankly, I get paid in dollars, so I don't give a rusty f*ck what happens to Greece or the euro. The more the euro declines, the better off I am. How's that for enlightened self-interest?
02:47 March 24, 2010 by peschvogel
The US Dollar will go to parity with the Euro after Greece and Spain and then it will appreciate. Have you ever seen the owl in the USD? It has significant meaning..
02:49 March 24, 2010 by baltog
Prufrock2010 ! you are very pasioned against greece! Bravo! I have the feeling that you are not european ! anyway, This kind of fanatic stucture reminds me eastbarbarian hordes! Are you sure that you are german?..the second possibility of your psychodrama is some personal issue...like a wife lost with a greek..or maybe some infantile trauma...a mother lost with a greek maybe? You have to take care of it anyway!
02:50 March 24, 2010 by Prufrock2010
Stop smoking crack. You're almost starting to make sense.
02:57 March 24, 2010 by baltog
Prufrock2010 Drugs are not the solution..there are plenty of german (or not) medications for your case......ah!!.. and don;t sleep with your passport there are other solutions...
02:59 March 24, 2010 by Prufrock2010
I've made it quite clear in several posts that I am American, not German. And I'm not the one on drugs around here.
03:03 March 24, 2010 by baltog
ok! so have you been in greece? why you are so angry?
03:07 March 24, 2010 by Prufrock2010
I don't care for corruption and blackmail. Simple. It goes against my ethical upbringing.
03:13 March 24, 2010 by baltog
Has the american goverment asked you if you 'll pay money for callifornia? Is that moral? Is the US _callifornian citizen 3world citizen because Schwarz f@@ked the state of callifornia?
03:17 March 24, 2010 by Prufrock2010
I paid taxes in the state of California for 30 years. Arnold didn't f*ck the state of California, Reagan did. And then George W. f*cked the whole country. What's your point?
03:23 March 24, 2010 by baltog
I pay 100000 euros taxes/year in greece. The debt of greece is smaller than US's. The difference between greece and callifornia is that greece pays 6,2% interests!! and obviously this period is a victim of an antieurospeculation.
03:33 March 24, 2010 by Prufrock2010
No, the difference between California and Greece is that California is the sixth largest economy in the world, and Greece is a third world country riding the coattails of industrial Europe. Greece pays 6.2% interest because its sovereign debt is out of control due to its own machinations and no one wants to buy Greek bonds. And if you pay 100,000 euros in taxes per year in Greece, you may be the only person who does so.

Since I have just returned from California and am a little jet-lagged, I must sign off for now. I trust that this scintillating discussion will continue tomorrow as the clock strikes ever closer to Greece's inevitable day of reckoning.
03:36 March 24, 2010 by baltog
ok have a good night! you are right is time to sleep!
08:20 March 24, 2010 by kaliopla
Hello, the only thing that maybe Germany can do to us Greeks ( I mean to us the Greek middle income citizens, not the Greek politicians, not the media sharks not the big sharks of Greek business such as Latsis, Kokkalis, Vardinogiannis, Aggelopoulos, etc...) is to wake us up !! Thank you Germany , keep on pressing please !! It is the only solution so that we can wake up and actually do something and throw out all these above criminals in some way by wakign up !!! Please keep on pressing !!!!
09:31 March 24, 2010 by GabIng
Kaliopla this is the only good thing that might happen from this thing. That the people in Greece might wake up as you say. Then all the past riots will be nothing compared to what may come. And finally all these politicians and their friends who brought the country to this situation will have to pay. Of course it will be nasty and the situation will be bad for many years, but at least it will be a chance for something new.

And prufrock, i dont get how you put Greece in the third world( I mean with which definition of a third world country) but if the western First World shows its development and class by "exporting" democracy and civilization the way it does today then let it be. Call me 4th world citizen I ll take it. Not all of as have the same advanced and righteous "ethics" like your (first world of course) ethics mentioned earlier.
10:50 March 24, 2010 by vjörn

Stop smoking crack. You're almost starting to make sense.

you mean this?

10:53 March 24, 2010 by Prufrock2010
I never believed in exporting democracy. Iran is a democracy. Iraq is a democracy. Even Afghanistan calls itself a democracy. How's that working out?

Greece, on the other hand, is the birthplace of democracy. The word democracy itself is Greek in origin. Democracy shouldn't have to be exported to its place of origin. Perhaps one of the great lessons here is that the demos are not ready for democracy after all.

The ethics I referred to are my ethics, not necessarily the ethics of my land of origin. In adulthood one is expected to make such distinctions.
11:56 March 24, 2010 by kaliopla
I do not have anything against USA, I think that they do a great job in many things, such as collecting all the greatest minds in the world and offering them great opportunities,but becoming implicated in other countries wars I do not get it, why? Unfortunately I am not sure if Greece would do not do the same thing if it was the greatest power in the planet, the same applies for all countries because the truth is that the countries are not governed by the people for the people, but by the politicians for the interest of the sharks with money and this apples anywhere.
12:45 March 24, 2010 by Prufrock2010
Kaliopla, I couldn't agree more.
18:34 March 24, 2010 by peschvogel
Greece is going down. The IMF cant be used. Germany must pay. Spain & Portugal are next. Schade..
23:50 March 24, 2010 by Prufrock2010
Merkel and Sarkozy seem to disagree with you on your IMF theory, blackbird. But what the f*ck do they know?
00:24 March 25, 2010 by peschvogel
They are "talking" for the last month on "everything" if you been paying attention. Leaks by the French, Germans of:

1. Kfw bailout thru loans

2. IMF bailout

3. French-Dutch-German bailout

4. No bailout by Germany

5. All EU and no German bailout

All of this is BS talk by politicians to effectively "talk down" greek spreads. The talk today of using the IMF will change to another way next week. Fact is, they cant use the IMF. It breaks the rules of what the IMF is used for. The IMF is used for "currency" problems of "native currency" countries. And the Maastericht Treaty doesnt allow it either.

Be prepared for yet, another story fromm these knuckleheads again soon. The 3rd week of April is when the last hour deal can get done. Greek Spreads have gone back up this week and esp today with Portugals downgrade. Next week at the EU Summit is when they will "say and do" something and 3rd week in April is when they "announce" the bailout...
10:04 March 25, 2010 by GabIng
OK, did I mention USA and I dont know it?

I talked about the western First World which means many countries who have , or are still doing their thing around the world. Also countries who can afford their "First World" lifestyle by exporting weapons to other less fortunate countries .

So my point is that I can come up with many (some logical ,some completely stupid) arguments to what one might consider as a 1st,2nd,3rd,4th world country.

My remark to prufrock though was why he/she calls Greece a 3rd world country. Are there some statistics, or data that would support such a characterization? If yes then please tell me what that would be, provide me a link or something, cause I would be interested.

If there is no official data and it is a personal opinion of prufrock then where is it based on? The corruption of the politicians and their friends? If yes how can he/she identify the greek people as a whole to the politicians and their works that brought Greece to this point. And especially when a couple of posts above he/she said that there is a clear distinction between the actions/ideas of an individual and the actions/ideas of a land/government?

I just hope his/her arguments are not something like this again:

"Greece needs to be expelled from the euro zone and go back to goat herding. Greece has been irrelevant for 2000 years, and should be relegated... blah blah"
21:56 March 25, 2010 by tattooing18
22:09 March 25, 2010 by peschvogel
Wow, and I thought my rants were slighted. The above cry for help is a growing nationalistic problem for Germany & Europe however, the New World Order will make sure folks like the above "tatooing18" (must be his profession and IQ) will submit. They are tracking his PC now. Submit you fat, non-conformist skinhead!
22:22 March 25, 2010 by danielcmarshall
The key word here is political posturing. Perhaps instead of sponging off The Deutsch Budesrepublik, the Honorable Prime Minister should resign. The Helenic electorate should put someone in who can accept responsibility for the country's own issues, and stop playing the blame game with former adversary. Prime Minister Papandreou sounds like a desparate politician who is looking for every reason to save face and thus save his job. End of story.
22:29 March 25, 2010 by peschvogel
Should Zapato resign as well? What about Portugal's PM? They are absolutely next...
11:37 March 26, 2010 by kaliopla
I think we as simple people must understand what is going on, they do not care about us, only for profit. In this context, someone must be the bad, someone the good boy, someone else the obedient boy, etc...Unfortunately we the people do not have the power, or if we have it we do not execute it, why? Because of fear of responsibility, or because we tell ourselves "come on I will save this world, who am I ? I should take care of my family and that is all, and not our common interest" This is also how Greece arrived to this point, because every family in Greece was observing politicians stealing and instead of showing to them the exit we voted for them again because we found one politician we somehow knew through someone else and he promised to us a job for us, for our kids, for our brother or sister and that is why we voted for him again even if we said later that he stole us again and that he is ineffective !unfortunately this is the truth otherwise these 2 parties would not exist anymore having this power..Our prime minister now ok he did what he could now under the circumstances, at least he did something, he worked, but now we will have to see him in Greece how he is going to give justice to people, because if people see politicians going into jail (those whose name is implicated in a scandal) then even if the measures are harsh we are going to accept them. But if we see some true justice and all people to pay, not only the middle income employees
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