21st Sep 2020

Germany underlines its European credentials in Greek bail-out debate

  • The German government has faced criticism over its level of willingness to help Greece (Photo: Malik_Braun)

The German government sought to uphold its European credentials on Monday (26 April), insisting that Berlin is committed to the preservation of eurozone stability.

At the same time however, Chancellor Angela Merkel and German finance minister Wolfgang Schauble were at pains to stress that any bilateral support for debt-ridden Greece would be made dependent on Athens outlining further austerity measures for the years to come.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"We need a positive development in Greece together with further savings measures," Chancellor Angela Merkel told reporters in Berlin. "Germany will help if the appropriate conditions are met. Germany feels an enormous obligation towards the stability of the euro."

Greece's centre-left Pasok administration has outlined a series of spending cuts and tax increases in order to reduce the country's deficit by four percent this year, but Berlin wants to see a list of austerity measures to be taken in 2011 and 2012 before providing support.

"If Greece is ready to accept tough measures, not just in one year but over several years, then we have a good chance to secure the stability of the euro for us all," said Ms Merkel.

The sentiments were echoed by Mr Schauble, who urged German parliamentarians and opposition party chiefs to support aid to Greece, but only once detailed lending terms are agreed with EU and IMF officials under a three-year package.

"We hope that the negotiations with Greece can be brought to a conclusion by the weekend," the finance minister said, referring to the ongoing talks taking placing in Athens, adding that Germany should not forget its 20th century history.

The government of Europe's largest economy is set to provide the largest slice, around €8.4 billon, of the €30 billion euro area countries have committed to provide to Greece this year, should market financing become non-viable. The IMF has agreed to provide €10-15 billion in addition this year.

Polls suggest the measure is unpopular with a majority of German citizens, a fact that makes electioneering difficult in the country's populous North Rhine-Westphalia state, which is scheduled to hold regional elections on 9 May.

Commission and ECB officials are currently carrying out an assessment on whether to recommend that euro area states provide aid to Greece, following the country's formal application for support on Friday.

A EU official indicated on Monday that the decision will be based on "state refinancing needs" and "market developments". "There are a number of indicators, but in the end there is a judgement to be made," the official said.

Italian criticism

Earlier comments by Mr Schauble in Monday's edition of the mass-selling Bild newspaper, again calling for Greece to outline austerity measures for 2011 and 2012, provoked criticism from Italian foreign minister Franco Frattini.

"I am concerned by the intransigence Germany is showing," Mr Frattini told journalists as he arrived for talks in Luxembourg with his EU counterparts.

"This is not a rescue operation [of Greece], this is a consolidation of Europe's walls, the walls of the euro, it's a rescue for all of us," he said.

A perception of German foot-dragging also hit financial markets on Monday, with yields on 10-year Greek bonds approaching 10 percent, a new decade-high for the country.

There were also signs that the contagion appeared to spreading to other eurozone states, with Portuguese bond yields jumping to over five percent, also a new high for the country since it joined the euro currency.

MEPs warn of 'significant gaps' in budget talks

The budget committee chair said the European Parliament expects tangible improvements to the package in its talks with member states - while the German minister argued that the EU leaders' deal was difficult enough.

Top EU officials urge MEPs give quick budget-deal approval

MEPs criticised the EU deal on the budget and recovery package clinched by leaders after five days of gruelling talks, saying it is not enough "future-oriented", and cuts too deeply into EU policies, including health, innovation, defence and humanitarian aid

EU Parliament gears up for fight on budget deal

European parliament president David Sassoli said certain corrections will have to be made in the budget, citing research and the Erasmus program for students, calling the cuts "unjustified".

EU leaders agree corona recovery after epic summit

After gruelling five-day talks, EU leaders agreed on €390bn in grants and €360bn in low-interest loans to hardest-hit member states - after much opposition from the Dutch-led 'frugal' bloc of countries.

EU summit enters fourth day with recovery deadlocked

After bilateral negotiations continued all Sunday night, mostly to try to convince the 'Frugal Four' to move their red lines, European Council president Charles Michel is expected to table a new proposal on Monday afternoon with €390bn in grants.

News in Brief

  1. Belarus president puts army on EU borders
  2. US: Lebanese group hoarding explosives in EU states
  3. Russia loses EU sanctions appeal
  4. UK guidelines explain Brexit treaty-violation plan
  5. Over 10,000 corona cases a day in France
  6. Greek police move Moria refugees following fire
  7. WHO warns Europe not to cut 14-day quarantine period
  8. MEPs urge EU Council to 'finally' protect rights in Poland

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  2. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector
  3. UNESDAReducing packaging waste – a huge opportunity for circularity
  4. Nordic Council of MinistersCOVID-19 halts the 72nd Session of the Nordic Council in Iceland
  5. Nordic Council of MinistersCivil society a key player in integration
  6. UNESDANext generation Europe should be green and circular

Latest News

  1. Commissioner: No one will like new EU migration pact
  2. Buying an EU passport 'no use for evading sanctions'
  3. MEPs call for first-ever EU law on Romani inclusion
  4. EU to help draft Libya's strategy on border security
  5. Spain to recognise Kosovo if it gets Serbia deal
  6. Ylva Johansson on Migration and Drama Queens
  7. Does Erdoğan's long arm now reach Belgian universities?
  8. Biden threatens UK trade deal over Brexit shambles

Stakeholders' Highlights

  1. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  2. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  3. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  4. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  5. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis
  6. UNESDACircularity works, let’s all give it a chance

Join EUobserver

Support quality EU news

Join us