Berlin 14-03-2010
The Euro Zone states have agreed to make ‘co-ordinated bilateral contributions’ in loans or loan-guarantees to Greece if Athens finds itself unable to refinance its debt and if Greece itself requests this help from the EU.
This means that the Euro zone will provide a multi-billion Euro bailout as part of a package to shore up the single currency – this after weeks of turbulence and a state of flux in currency markets.
Germany, the country in the EU that traditionally ‘carries the piano’ – that is carrying the most financial weight – had for domestic political reasons seemed reluctant at first to come to the rescue.
However it is now becoming more apparent that it has in fact been Berlin -along with Brussels – which has played a pivotal role in organising this rescue package.
This despite universal domestic hostility in Germany to any move which would seem to hand-over their hard earned German taxes to seemingly easy-spending irresponsible governments.
A lead player in all of this has been the German Finance minister Schäuble who enjoys a reputation as a very solid pro EU integrationist.
Many in Brussels think that chancellor Merkel and her finance minister Schäuble want to establish an EMF – but many also suspect that they may be floating the idea to counter domestic public opinion in Germany which has been mainly hostile.
It also appears likely that the Euro’s rulebook will have to be profoundly amended – and include ‘big-stick’ tactics - to enforce more fiscal discipline onto those members who allow their finances to degenerate as Greece has.
Presently the rules governing the operation of the Euro forbid anything resembling a bailout for a country on the brink of insolvency.
Meanwhile in Greece, Prime Minister George Papendreou has called for draconian measures of government saving and frugality which he hopes will be enough to assuage the Euro zone partners.
Wolfgang Schäuble, the German finance minister, supports the tough new cutbacks being plotted by the Papandreou government.
In 1990, Schäuble was victim of an assassination attempt by an insane person severely injuring him and has been paralysed and confined to a wheelchair ever since. He finds himself currently in hospital, and will not attend the meetings in Brussels this week to discuss both the proposed EMF and other ways to assist Greece.
Tags: Greece Berlin, Merckel Berlin
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