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Verbal skirmish between Berlin and Athens flared up Europe

17 November 2010 / 17:11:58  GRReporter
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We have never seen the Greek Prime Minister so angry before, reads the front page the Düsseldorf economic edition Handelsblatt in relation to George Papandreou's speech at the meeting of the Socialist International in Paris in which he sharply criticized the European policy of Germany. In the article entitled Debtors against Creditors, the newspaper recalls the roles of Germany and Greece in the EU, adding that the tones became more acute: Greeks, Spaniards and Irish attacked verbally the German government in novel tone. Countries that have large external debts reject the Chancellor's insistence on the stability of the euro. The European currency is in danger.

The German edition adds that the Greek Prime Minister identified Germany as the culprit for the exacerbation of the crisis in the euro area and was followed in this criticism by his Irish counterpart. The paper highlights slightly mockingly that creditors like Germany have provided over 8 billion euros of European funds last year. These funds were to be used by countries such as Greece, Ireland, Portugal and Spain, which, however, believe that even the discussion about the plight of their finances is detrimental. All these countries are privileged members of the EU. Brussels granted 3.3 billion euros only for Greece last year and the richest countries in the European Union and the International Monetary Fund would guarantee for the country if it is not able to pay its debt.

The daily Die Welt stressed that nerves are stretched and that George Papandreou should be engaged to support the stringent economic measures that his government introduced rather than to attack Germany. The newspaper notes that the state deficit of Greece was revised two days ago and stresses that the French-German proposal caused discontent in many governments in Europe and the European Central Bank. The end of the text, however, still noted the statement of one of the key diplomats in Europe that we should do what Germany wants, because nothing happens without Berlin as we know.

One of the countries that responded negatively to the possibility of delay payment of the Greek debt was Austria. Its Financial Minister Joseph Pröll directly threatened that his country might not pay the next month sum of 190 million euros, which is its EU share for Greece. He said that Greece did not meet its obligations in relation to improving its finances. According to the latest report, it has not complied with its commitments at the payment of taxes level. In view of these data we have no reason to approve the contribution for December, said Joseph Pröll and added that he would be very critical in his speech in Brussels. Shortly later, the turmoil his statements caused made him soften his tone and he said that Austria is ready to provide the amount of 190 million if Athens keeps its promises. He also added that Greece would have to eventually make some changes in its the program, but is on the right track.

The Finance Minister of Germany Wolfgang Schäuble criticized Greece minutes before the meeting of the Council of economic ministers Eurogroup. He said that when he heard the statements of Papandreou in Paris I thought that Greece had received abundant solidarity from Germany and the European Union. Solidarity is not a one-way road, added pointedly the German politician. Minister of Economy of Germany picked up the baton, saying that the European Union can not throw money from helicopters. Rainer Brüderle added that the national economies of countries like Greece and Ireland, which must cope with serious budget crises, need to make reforms to reduce state deficits in a way that will not require to seek help.

Meanwhile, international media report that the Greek Prime Minister’s verbal attack on Germany actually has expressed publicly what senior European diplomats and functionaries shared in discussions among themselves in recent weeks.

The European leaders met Angela Merkel's proposal at the summit last month for revision of European conventions and creating a new mechanism for economic support for countries like Greece with the participation of private investors to bear the main burden with quiet discontent. This resentment began to boil after the fast response of capital markets and rising interest rates. Then German chancellor was accused of putting many of her colleagues in uncomfortable situation in her attempts to improve her personal relations with German taxpayers.

Things were said that could not be written, said Daniel Gros, director of the Center for European Policy Studies in Brussels in his assessment of the angry comments made to Berlin. More and more countries raise their voices Europe to be united again. Economic experts in Germany recognized on their part that uncertainty about the future of the economic support mechanism is not the ideal option and insist that they need more time to study the proposal in detail.

The European Council full time President Herman van Rompuy attempted to chill out the hot Greek-German relations. In his speech at the European Policy Centre former Belgian Prime Minister stressed the positive roles that Angela Merkel and George Papandreou played during the crisis in the Eurozone. Who else but the Prime Minister Papandreou could support the rigorous measure in Greece? And who else but Chancellor Merkel could persuade public opinion, part of which was opposing the need for establishing a mechanism for economic support of Greece, said Herman van Rompuy.

Tags: AthensBerlinPapandreouMerkelEconomic crisisEuropean Union
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