Merkel warns Greece: it's time to show willing
AFP/The Local · 18 Jun 2015, 11:36
Published: 18 Jun 2015 11:36 GMT+02:00
Updated: 18 Jun 2015 11:36 GMT+02:00
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"In the economic and currency union, responsibility for oneself and solidarity go hand-in-hand," Merkel told the Bundestag (German parliament) in a government position statement.
Greece had received "unpecedented help from its partners" in recent years, while other countries like Spain, Portugal and Ireland had recovered through the "help in exchange for your own efforts" principle, Merkel said.
But she was hopeful that a last-minute agreement could be reached and said "it remains the case that Germany's efforts are directed at keeping Greece in the eurozone."
But in a combative editorial published in Thursday's edition of Berlin daily Der Tagesspiegel, Greek Prime Minister Alexis Tsipras rejected a broad swathe of "myths" about his country's finances and behaviour.
"Anyone who says that German taxpayers are paying for the salaries and pensions of the Greeks is lying," he wrote.
He said that the deep cuts in Greek public spending in recent years, which creditors want to extend in exchange for unlocking fresh injections of cash to allow Greece to pay its debts, had done nothing but worsen the recession.
That's why, he argued, Greece's budget looked so bad compared with that of a country like Germany, with pensions spending at more than 16 percent of GDP (versus Germany's 10.4 percent).
Problem not spending, but income
But that's because the economy has shrunk so drastically even as pensions have been cut, Tsipras said – not because the Greek system is unusually generous.
Arguing that the pension system represents everything that is currently wrong with the Greek economy, he wrote that "the problem is not on the spending, but the income side".
"Until now, younger people have paid for the pensions of their parents' generation.
"In the crisis years, this relationship has been reversed, and in today's Greece, pensioners are paying for their children's living costs."
Tsipras makes clear his "determination" to keep the pension system alive as a crucial pillar of Greek society.
But he emphasizes that "we can't allow the obsessive use of statistical parameters to destroy a compromise that's been maturing in recent months."
"That's our duty. All of our duties."
Euro secure against Grexit
Meanwhile, German central bank chief Jens Weidmann said in a newspaper interview published on Thursday that it would not be a problem for the single currency if Greece were to leave.
"The continued existence of the euro is not tied to the development in Greece. But certain contagion effects cannot be ruled out because the character of monetary union would be altered by a 'Grexit'," Weidmann told French daily Les Echos.
The interview was also published in the Spanish and Italian dailies El Mundo and La Stampa.
A so-called Grexit would be an exit by Greece from the euro area.
"The character of monetary union would also change if individual countries do not fulfil their responsibilities for a stable currency and turn monetary union into a transfer union which their populations never voted for," Weidmann continued.
"That is also a contagion effect, the negative consequences of which should not be underestimated."
He insisted that "the responsibility over whether Greece stays in the eurozone lies with the Greek government".
Time running short
"The last few days have shown that there isn't much time left to reach an agreement," Weidmann continued.
Eurozone finance ministers were set to hold crunch talks over Greece in Luxembourg on Thursday, after a barrage of warnings that the country risks a damaging exit from the EU if it fails to strike a deal with its creditors.
As negotiations between Athens, the EU, ECB and IMF over the last €7.2 billion tranche of Greece's massive international bailout grew increasingly acrimonious this week, officials started openly discussing the prospect of Greece crashing out of the euro.
"The ball is definitely in the court of the Greek government in which direction they want to take their country," Weidmann said.
"Despite the risks from a state default and possible contagion effects, we have to ensure that the foundations of monetary union as a stability union are not undermined. Aid and solidarity are part of that, but agreements must be adhered to," he said.
"A revocation of the agreements and a halting of repayments to the partners who have provided aid, or to the European Central Bank, would certainly have consequences for Greece which would be difficult to keep under control," Weidmann warned.