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Merkel: Greece expulsion from euro not an option

AFP/The Local · 26 Apr 2010, 17:24

Published: 26 Apr 2010 17:24 GMT+02:00

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Speaking to reporters in a hastily arranged statement, Merkel said: "I say quite clearly. Germany will help, if the corresponding pre-conditions are met. That will take a few days."

She said negotiators from the International Monetary Fund and the European Commission must thrash out with the Greek government a "sustainable, well worked-out" plan to get the country's spiralling deficits under control.

Merkel said she had "faith" that these talks would produce a positive solution but emphasised that it would take a few more days before the full details of the programme were known.

With an eye on a key regional election on May 9, however, the chancellor said she could "understand the concerns" of the majority of Germans who are opposed to bailing out Greece.

The ball was now in the Greek court to contribute to a stable euro, she said.

"If Greece is ready to accept tough measures - and not just for one year, but for several years - then we have a good chance to keep and secure the euro as a stable currency for us all."

On Friday, the Greek government formally asked for a €45-billion ($60-billion) EU-IMF loan plan to be activated to help the country out of its crippling debt and deficit crises.

Greece's cost of borrowing rose above nine percent for the first time on Monday whereas the EU money would be available for around five percent. More than eight billion euros of Greek debt was set to mature by May 19. As Europe's top economy, Germany would be expected to shell out the lion's share of the cash for any emergency funds, with its portion estimated at €8.4 billion.

But Merkel firmly dismissed the notion, expressed by some politicians in Germany, that Greece should be expelled from the euro area. Asked if this was conceivable, she replied: "No. I say very clearly no."

"What we need is a quick reaction for the stability of the eurozone as a whole and everything that takes us away from this central goal is at the moment not an option ... we do not need uncertainty, but certainty," she said.

Aware of the reluctance of taxpayers to foot the bill for a bailout of a country that seems to them as fiscally profligate, other senior German officials have talked tough on the possibility of providing aid.

Foreign Minister Guido Westerwelle stressed earlier Monday that Greece needed to apply increased budgetary rigour before expecting European funds. And Finance Minister Wolfgang Schäuble said Greece must come up with broader economic reforms in addition to deficit-cutting measures.

Germany's perceived hesitance has raised concerns among other eurozone partners, with Italy's Foreign Minister Franco Frattini saying he was "concerned by the intransigence" demonstrated by Berlin.

Story continues below…

Frattini's sentiments were shared by Luxembourg Prime Minister Jean-Claude Juncker, normally a staunch ally of Berlin.

"When you cast a domestic eye over European issues instead of a European eye over domestic questions, that worries me," said Juncker, who also acts as finance chief for the 16 eurozone countries.

Others were even more strident in their tone.

European Green party leader Daniel Cohn-Bendit described Berlin's policy as "politically very stupid."

AFP/The Local (news@thelocal.de)

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Your comments about this article

13:28 April 26, 2010 by Prufrock2010
The harbinger of things inevitably to come. Italy is already staking out its territory in the bailout queue.

If it's a "shared house," some of the tenants need to be evicted.
14:43 April 26, 2010 by AirForceGuy
How much debt did the US 'forgive' of Germany's after WWII? Now that Germany is the "Big Man' in the EU, thay must play the part the US did for them in the late 40's and 50's... The shoe is on the other foot now!
15:07 April 26, 2010 by bryan001
I am concerned by the intransigence Germany is showing," Frattini said as he arrived for talks in Luxembourg with his EU counterparts.

"There can be no doubt - if the (shared) house is in difficulty we have to save the walls because we are all in this (shared) house," the Italian minister insisted.camper trailers
18:29 April 26, 2010 by moreanon
And why did the US 'forgive' Germany its debt during the early Cold War? To ask the question is to answer it.
18:30 April 26, 2010 by nashville
AirForceGuy, your analogy is so far off it's comical. Greece is not paying to rebuild itself after major war damage, they lied and cheated and borrowed money they cannot repay (we call that stealing). And now Germany is supposed to act like the US? The US was magnamous and gracious. And look at how Germany has thrived since. Germany would be plain gullible and naive to just give Greece money. What have they done to earn the trust of the lender?
18:35 April 26, 2010 by pmach
I dont think the shoe is on the other foot as noted by airforceguy as we are talking about fiscal irresponsibility and wide spread fraud.

The rule of lending money is the lender makes the rules period. If Germany is going to lend to Greece then Greece will have to meet its credit demands like any other borrower.

Germany has become the largest economy in the Euro by not making hasty decisions and I see no reason why that practice needs to change because of Greece, France and Italy. Sit back relax and wait ...or go elsewhere for the money.
18:54 April 26, 2010 by wmm208
nashville, not about "earning" trust of the lender. Its about all the massive loans Germany has loaned to Greece, Spain, Portugal that would have to fail if the Euro failed. Its about "security" and "currency" not trusting the borrower, please...
01:31 April 27, 2010 by nepo77
The Pax American monetary system is constructed so everyone fails if the time line is long enough. Thats just mathematical fact if you understand Monetary Mechanics. Thats why the US was in the 2. World war in the first place. Not that there is a US as a people, there is a US as a bank controlled corporation. Ultimately everyone including Greece and Germany are insuring the value of the dollar -not the Euro. A default now would be much easier to handle than waiting for the inevitable.
01:48 April 27, 2010 by wmm208
nepo77 - In God We Trust
02:25 April 27, 2010 by Prufrock2010
peschvogel --

"In God We Trust" did not appear on American paper currency until 1957.
02:33 April 27, 2010 by wetdawg~
I say again...the most inexpensive way out is to simply buy Greece, and turn it into a reformed German State. Get something for your money...
06:28 April 27, 2010 by Zobirdie
@Airforceguy - Yes. And Germany paid it all back with interest. And now will finish paying back its WWI debts.

America helping Germany after the war is like You helping out a friend who you know is a good egg, but lost his jobs and can't pay his bills but as soon as he has another one, he will pay you back.

Germany helping Greece is a bit like you throwing money at a guy who dodges debts left right and center and you know hasn't told the truth about anything in at least ten years.

Why should Germany(read- the German Tax payers) help Greece at all? The only reason they pretty much have to is because of the Euro. Hopefully, this will be the death of the Eurozone. It is atrocious that Germany has to now pay for every EU country who can't get its house in order. Germany has enough problems to deal with- like 20% unemployment in the east.
08:40 April 27, 2010 by Essertpitay
Kick the greeks out !! What have they ever brought to civilisation ?...in the last 2000 years that is...

They are a pain in the neck...They are behaving like cry-babies, no sens(e) of national pride...

Let the Turks in instead, They will toe the line.
11:39 April 27, 2010 by nashville
I do believe that before Germany can give a penny to Greece that they do have to trust that the Greek govt. will come up with some fiscally sound plans to get the deficits back in control. Though this would be the first time I'd agree with Westerwelle, the loans can't be automatic without any responsiblity on the part of Greece. That is what I mean by trust....trusting that this kind of reckless abandon with regard to borrowing and spending won't happen with the money they're begging for to get them out of the mess they made.

While the euro has been somewhat beneficial to us as we travel in the Eurozone frequently and now do not have to exchange monies, I wouldn't care if they threw Greece out for this. Problem is it would just start a chain reaction....first Greece, then Portugal, and so on. There must be some sort of punishment for this behavior or it will continue.
12:38 April 27, 2010 by kaliopla
I am sorry to say that even if I am Greek but Germany must press for a specific condition : Either you will fire unnessecary Public employees or we do not give you any money.

I work in the private sector and it is not fair to the rest

of us to see our fellow Greeks being lazy in the Public sector and come home every day at 14:00 while in the Private sector the things are very harsh like in the other countries.

Mayby a small majority of Greek public sector employees do

work with conscioussness but I know that the lazy majority

do not let these people work. Imagine attitude !!

These criminal political parties were actually given the

power because they had promised these jobs to the majority

of their voters with the condition that they would vote

for them. And that happened for all these 30 years.

And none political party had the courage to stop that, of

course. If they offer you a job with zero risk of being

fired, flexibility to leave every day from work at 14:00, maximum, is this a job? You could be tempted, because

of course the insecurity of the private sector is

terrifying, I am tempted as well,but now I see that this mess brought us here.

Because the Greek simple people become this way like their

fellow politicians they accuse. I do not want to become like that.

I am sure that this happens in a lot of countries as well

and maybe these countries' governmnents know how to hide it

and they will never reveal it but this is wrong and if anywhere else in the world this would be revealed I would say the same things.

The only thing that seems a little bit "odd" in a bad sense

is the fact that this government chose to reveal this..?

It is a little bit suspicious, because by revealing this

it would suffer this political cost and this government is

the same political party which contributed a lot in this

mess, so I wonder for their "good" motives.

So, if Germany can press Greece to fire public sector employees who are not needed it would be I think

a road to the right direction.

I am a Greek citizen and I would prefer of course that Greece

gives the debt owned by the stolen money because all Greek

political parties know who stole all these years so much

money but because only with a Greek revolution this would

be revealed maybe until then the only solution is the

Public sector solution
16:30 April 27, 2010 by Prufrock2010
As to the expulsion of Greece from the euro zone, I am reminded of a famous quotation of Oscar Wilde. As he was dying in the shabby Hotel d' Alsace in Paris, he was forced to look at the hideous wallpaper in his room night and day. About a month before his death he said: "My wallpaper and I are having a fight to the death. One of us has got to go."

As between Germany and Greece in the euro zone, one of them has got to go.
17:15 April 27, 2010 by Dan Asta
What did Greece do to earn trust?

What did Germany do?

It pillaged.

The money was given to Germany so as not to repeat the austerity measures of the interwar period.

Germany was essentially rewarded for bad behavior--to put it mildly.
17:29 April 27, 2010 by Prufrock2010
"The money was given to Germany so as not to repeat the austerity measures of the interwar period. Germany was essentially rewarded for bad behavior--to put it mildly."

If you're referring to the Marshall Plan, you are mistaken. The money was provided for the rebuilding of all of Western Europe, not just Germany. Not only did the Plan result spectacularly in its intended effect, it was also paid back. All of Western Europe benefited from the Marshall Plan.

The current Greek situation bears no similarity, as it is not the result of war but of fraud.
21:35 April 27, 2010 by wmm208
Greece downgraded to Junk today. Junk! And your going to bailout Junk. Ha ha And Portugal was downgraded today because they are next. Contaigion has "officially" spread. German bunds will be under immediate pressure....Pay, pay, pay...Who will lead???
01:24 April 28, 2010 by Prufrock2010
"Who will lead????"

I nominate you, peschvogel. A Nobel prize in economics awaits you for your prescience and global financial acumen. You might want to get someone to write your acceptance speech for you, however. Schade....
02:11 April 28, 2010 by wmm208
Who will lead Europe out of this mess? Certainly Germany's wealth will now be diminished due to the transfer of German taxpayer money to the countries going under. I see that in the east, Ukraine and the Baltics are in trouble and returning to Soviet umbrella. Fun is about to begin within Eurination. My guess, Germany will have to pay, pay, pay...Schade.
02:19 April 28, 2010 by Prufrock2010
You know what, peschvogel? You may be illiterate, but you're probably right on this one.
02:25 April 28, 2010 by wmm208
Its been known by "insiders" for almost a year now but the public is just becoming aware of the reality of the once almighty Euro. Do you get so much satisfaction for calling people out for bad spelling? What makes you the clear expert on: a) spelling b) correcting commentors on spelling c) writing about it. Perhaps I was illiterate. Do you see flaws in everyone? Do you make fun of people who may have physical handicaps? Typisch..That speaks alot about your intelligence. Surely, you need to be put in your place. umph
06:13 April 28, 2010 by Der Grenadier aus Aachen
I am actually starting to think these wingnuts are intentionally trying to cause dissent in the EU zone to cause the Euro to fail.

But that's really not surprising, coming as it does from a culture that has no concept of solidarity.
12:00 April 28, 2010 by Prufrock2010
Are you familiar with the concept of Freudian projection, peschvogel?
13:12 April 28, 2010 by bams
My tax Euros are paying for the Audi A8 Greek prime minister was using the other day. And I have to make do with a lowly small car. I am furious! Kick the Greeks out of EU.
14:59 April 28, 2010 by kaliopla
I understand you but be aware that not All Greeks are to blame for our prime minister's car. I wish we had the power to kick them out of our own House of Parliament or out of Greece, better, but I think we will need to cause a revolution to succeed that. Do you have any good advise?
15:51 April 28, 2010 by Prufrock2010
Sell Greece to Goldman Sachs. Goldman already acts with the arrogance of a sovereign nation -- it might as well be one.
23:54 April 28, 2010 by wmm208
I bet you Goldman Sachs can run Europe better than the Europeans. They run a tight ship. Europe is a ship which has strayed from port....
07:04 April 29, 2010 by Stef34
To me it's all about the euro/dollar exchange.

Greeks (and others, yet to be revealed) lied, forged documents and so on with the silent and secret consent of the strong european economies.

But this didn't matter to them now, nor does it matter now.

The whole issue is the ongoing war against the euro, and the attempt to bring the euro/dollar exchange rate down to 1,22 - 1,26.

Germany in my opinion is deliberately causing this because they want the euro to that level as it will be beneficial to their exports. The US also wants this as it serves their needs as well. The Greeks.....well...they don't care about this....

As for the measures, most have already taken place in Greece and the rest are in queue for ratification. When you go to Greece for holiday and pay for gas 1,5E/lt you'll feel it down hard!

But these measures won't solve the problem. Greece has almost nothing to produce to counteract its incompetitiveness (and incompetence). They need drastic measures in the perception of producing goods, what they actually have and can use as heavy industry and what not. This is a long talk and unfortunately I don't have the time right now.
08:54 April 29, 2010 by kaliopla
11:53 April 29, 2010 by chimpansi
I dont trust we are going to have a amicable political solution. Looking back at the history a war has always been a clean solution. Another world war would simply put a quick end to lot of problems. Even a global natural disaster will do this job. Intially it may appear chaotic but a new world order will prevail. Remember money is virtual!!
13:20 April 29, 2010 by kaliopla
I feel embarassed as Greek due to all this, but as a person I did not cheat, I did not send fake data, I did not steal, and finaly I did not vote the criminals that they are now governing us. What have I done to deserve me and many other Greeks all this sarcasm and animosity from fellow human beings from all around the world? We are not all Greeks bad, liars, this applies to all the people in all countries, i.e. not all Americans want to rule the world etc. But of course, the so much developed human being always judges before learning the whole story from all the sides, it is the easiest thing to do right?
13:49 April 29, 2010 by Stef34
When a ship sinks, it's usually the fault of one or two people, but there are lots of casualties...

Usually people who have only heard of Greece and its system, who haven't actually been there, worked there, lived there, been squashed by the system there, those people are opinionated relying wholly on the information conveyed through the media. Only a handful of them is reserved and wise enough to think that there can't be all rotten eggs in the basket.

The Greeks are worthy of their present condition because they (the majority) have put up with embezzlers and thieves. Let's hope that their present plight will also be their cornerstone, a new historical monument in their culture.....the day when they decided that they've had enough.
15:05 April 29, 2010 by kaliopla
My biggest question is why did this recent government choose to reveal it now since, I imagine, they have known this, I mean that Greece has been cheating all these years, since Eurozone was created. If they had not known it they must be very stupid. But I do not think they are so stupid, so why now? Maybe because the USA pressed them to do it now in order for us to depend on their IMF money more now because they need a specific exchange from us, what is this exchange they need from us? Do we have any oil under our seas or anything else?
15:07 April 29, 2010 by mrsams
"Germany will have to pay, pay, pay...Schade"

At least you accept that Germany is the leader of europe and the one who has the money.

Peschvogel,I hope we don't pay you in the future (country where you belong)
15:15 April 29, 2010 by kaliopla
Greece is such a beautiful country and we have made it like trush. What can I say? Maybe Greeks are the most egoist of all. I am so sorry for my country. We have not honored its past. We must be ashamed towards our children.
01:17 April 30, 2010 by wmm208
Pay, pay and pay but dont forget to ask for die zahlen, bitte....
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