Friday 24 March 2017

Merkel is profiteering from crisis, says Greece

German Chancellor Angela Merkel. Photo: Bloomberg News
German Chancellor Angela Merkel. Photo: Bloomberg News

ANGELA Merkel was accused yesterday of "profiteering" from the weak euro as she refused to commit Germany to supporting a European Union aid package for Greece.

Greece said that Germany was exploiting the country's distress while German exporters benefited from the weakness of the euro.

"By speculating on Greek bonds at the expense of your friend and partner, by allowing [German] credit institutions to participate in this deplorable game, some people are making money," Theodoros Pangalos, the Greek Deputy Prime Minister, said.

Jose Manuel Barroso, President of the European Commission president, has called for a decision on aid for Greece to be made at a European summit meeting at the end of this week.

He was backed yesterday by the Spanish, French and Italian foreign ministers, who said there was no choice but to back a bailout. Franco Frattini, the Italian Foreign Minister, said there was "a moral duty to intervene as soon as possible".

Backfired

The German chancellor has gained widespread domestic support for her refusal to bankroll Greece. Germany has regional elections in May and Mrs Merkel's stance is drawing comparisons in the German media with Margaret Thatcher, who famously refused to accept EU budget proposals when she was prime minister.

Guido Westerwelle, the German Foreign Minister, maintained that uncompromising stance yesterday, suggesting that "waving money" at Greece would undermine pressure for economic reform.

A threat from Greece to seek aid from the International Monetary Fund has backfired as the German Government, which had previously taken the collective eurozone view that IMF intervention would be unacceptable, has now decided to call Greece's bluff.

Jean-Claude Junker, Luxembourg's Prime Minister, tried to bring the two sides together yesterday, suggesting that IMF participation in any aid package might be acceptable alongside bilateral aid from eurozone members.

Meanwhile, ECB executive board member Jose Manuel Gonzalez-Paramo said bilateral loans to Greece could not be ruled out.

"Heads of states and government of the euro area have committed publicly to act in a determined and co-ordinated fashion if needed to preserve financial stability in the euro area," Mr Gonzalez-Paramo told reporters in New York. "By no means can you exclude, if needed, bilateral loans."

He said the measures announced by Greece to reduce the deficit "are very convincing". (©The Times, London)

Irish Independent

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