EU: Germany told to 'come clean’ over Greece

The Telegraph ^ | 9/30/2012 | Ambrose Evans-Pritchard

[bruinbirdman]

German Chancellor Angela Merkel must “come clean at long last” and admit that Greece will need help for another seven or eight years, the German opposition leader said over the weekend.

“The Greeks must stand by their commitment, but we must give them time. We cannot tighten the screws any futher,” said Peer Steinbruck, the Social Democrat candidate for chancellor. He said the political and economic fall-out from Greek ejection from the euro would be devastating and must be avoided.

The plea came amid reports that Berlin is so worried that a Greek crisis would spin out of control that it is ready to back the next €31bn payment to Athens under its EU-IMF Troika rescue, despite failure to comply with the terms. Wirtschaftswoche, a German news magazine, said Greece’s parliament merely needs to vote on a list of detailed reforms.

It cited warnings from a top EU official that “domino-effect” dangers are too great to allow the ejection of Greece from EMU. Authorities across the world – including the Bank of England – fear a surge of capital flight from Portugal, Ireland, Spain, and Italy if the sanctity of monetary union is violated.

Diplomats say concerns go beyond financial damage. Both EU and US officials are worried that the fragile security system of the Western Mediterannean could start to unravel if Greece is alienated and withdraws from Nato under populist leaders in the future.

Washington has put intense pressure on Chancellor Merkel to accept compromise that keeps Greece firmly anchored in the European bloc. Her ministers haves toned down their rhetoric in recent days.

François Heisbourg from the International Institute for Security Studies said an acrimonious Greek exit would be “extremely challenging”, leading to instability in the Balkans and opening the door to Russian meddling

[john drake]

too bad for Germany; still stuck in the guilt cycle from 70 years ago and the usual parasites from southern europe attempting to maintain the shame. Germany, get your old solingen steel ramrod spine back in place and tell them to solve their own problem and quit attempting pull the magnificent economic machine that Germany is, into the murky Mediterranean along with the rest of the hanger ons. Scheiss on them, macht schnell.

[skeeter]

Cannot wait for the west’s welfare state to collapse. And soon, before its too late.

[rbg81]

That is the problem with the slow, inexorable growth of Government. Entitlements become an addiction worse than heroin. When it comes time to implement spending austerity, you can't do it without throwing your whole society into upheaval and chaos. Thirty years ago it would have been painful, but doable. Now it like surgery without anesthetic.

The US will have the same problem when the time comes, and probably worse. Greece is a fairly homogeneous country—we are not. Even Spain might break up because of its austerity.

[Viennacon]

“Greece is a fairly homogeneous country”

Not anymore.

[Parley Baer]

“We cannot tighten the screws any futher,” said Peer Steinbruck, the Social Democrat candidate for chancellor.

Here we have one socialist trying to help out his fellow socialist in Greece. Let’s hope this clown does not get elected.

[Viennacon]

Are there any German parties that advocate leaving the EU? That would be the best option. Keep Germany for Germans, and all the money too.

[TADSLOS]

I would be interested to get your take on the subject, since you are there.

[yefragetuwrabrumuy]

There are times when trying to help just makes things worse.

In this case, Greece reminds me of a story by police novelist Joseph Wambaugh of a racist officer who was called to a scene where a known repeat offender, a violent black man, had been repeatedly stabbed, was having serious arterial bleeding, and was lying unconscious.

So the racist police officer made a great show to the onlookers of rendering him aid, by giving him chest massage. By the time the ambulance had arrived, he had pumped him dry, almost no blood left in his body. Which, of course, killed him dead.

But Greece is in about the same condition as that known repeat offender. It is vigorously hemorrhaging money, and instead of just leaving Greece alone, Germany is pumping more money through Greece, insuring that Greece will die.

[meyer]

Maybe it’s something weird about the European version of English, but why would Germany have to admit to Greece’s problem?

What Germany needs to do is secede from the EU before it all sinks together. I’ve heard somewhere that a German has to work until 70 to support a Greek’s retirement at 50. Don’t know how true that is, though...

[Cronos]

? Why?

[nathanbedford]

The German reaction, of course, depends on the relative sophistication of the witness. When I attend presentations with bankers and lawyers, they are fully aware of what is going on and they generally take the attitude that once again, Germany is being asked to shoulder the load for the rest of Europe.

An idea that war guilt plays a part in the pressure on Germany to bail out the lower countries is prevalent among the sophisticates and among tradespeople as well.

Some, not all, Germans believe that they are being taxed to transfer a debt from the banks to the taxpayers. Strangely, very few Germans hold the view that is prevalent among us conservatives which is that the European Union and the transnational banks are inherently undemocratic institutions and liable to commit tyranny.

I am frustrated that most of my interlocutors do not see this as a free-market vs. socialist question but as one of incompetence and self-indulgence

[TADSLOS]

Thanks for your response. I think Europe is our barometer for coming events here. Spain, Italy and France are all showing signs of a Greek style crisis. When the collapse comes, it will spread at the breakneck speed. It won’t be pretty.