The tough terms of the bailout hammered out early on Monday bear a distinct German signature, which Chancellor Angela Merkel hailed as a “fair” deal that held those responsible for the crisis to account. But commentators fretted Tuesday that the political toll of the brutal negotiations was still being counted.
“The battle to save Cyprus inflicted deep wounds on the eurozone,” the influential news weekly Der Spiegel said on its website. “The price of rescue is high: Germany is again the whipping boy,” it said, citing a pattern of recriminations seen in Ireland, Italy, Portugal, Spain, Greece and Cyprus as the debt turmoil has whipsawed through Europe.
Each time a eurozone country has sought help from international creditors, Germany as Europe’s top economy and effective paymaster has come to the rescue, but prescribed bitter pills as part of the treatment.
In the case of stricken Cyprus, a €10-billion lifeline came at the price of depositors in the two biggest banks – many of them Russian – paying huge levies on deposits over €100,000 ($130,000). The deal also effectively shuts down the island’s second-largest lender as part of an overhaul of what German politicians, among others, called a “casino” financial sector.
That plan came after massive uproar over a preliminary agreement a week earlier which would have taken the axe to the savings of much smaller account-holders that was widely seen as German-engineered, though hotly denied by Berlin. It prompted irate demonstrators to take to the streets of the Cypriot capital Nicosia with signs showing Merkel with a Hitler moustache and hundreds
of Twitter users to equate today’s Germans with the Nazis.
Respected Spanish daily El Pais went as far as to publish an editorial Sunday stating that Merkel “like Hitler, has declared war on the rest of the continent.” It later withdrew the column amid a furious outcry over the inappropriate Nazi comparison.
There are growing signs that Germany, whose taxpayers foot the bulk of the bailout bills, is growing testy over the mudslinging.
“It’s always the Germans’ fault!” the leading tabloid daily Bild said last week. “Yet of all people, we Germans are the target of criticism, even outright hatred, in crisis-plagued countries.”
But the Munich-based daily Süddeutsche Zeitung warned on Tuesday that Germany was walking a fine line politically.
“Careful, careful: Nobody should cave to the populist reflex to apply the same recipe in Cyprus elsewhere, such as in Spain. Germany certainly profits because without the currency union it would slide into crisis. Secondly, if the country continues to be so coldhearted it will pay an immeasurable political price.”
German Foreign Minister Guido Westerwelle lamented Monday that the “complex negotiations (over Cyprus) were accompanied by shrill slogans in the public arena and the media that were often unjust and hurtful.”
Wolfgang Schäuble, Germany’s powerful finance minister, offered a bit of schoolyard psychology as an explanation for the Germans being seen as the “bad guys.”
“It’s like in school when you get better grades and those having a harder time get a little jealous,” he told public television late Monday with a nod to Germany’s relative economic strength.
Merkel, who is vying for a third term in September elections, has tried to maintain an above-the-fray stance, calling the sniping the price of power. Senior German officials note that the United States also garners hatred for its huge global footprint.
The opposition has struggled to find a line of attack against her in the crisis, with her main challenger Peer Steinbrück this week zeroing in on the old agreement for Cyprus that had already been jettisoned.
Yet commentators note that Merkel, who routinely breaks popularity records thanks to her stout defence of German interests, had also been guilty of stirring the pot on occasion.
At the height of the Greek misery, Merkel chided southern Europeans for allegedly retiring at a younger average age than Germans while their governments were seeking a handout.