Berlin 23-03-2010
- Angela Merkel is not entirely dis-pleased for Germany with decreasing value of the Euro
[Photo credit -Wikipedia Creative Commons License Attribution 2.5 Brazil]
It seems like there is no avoiding some sort of showdown between Angela Merkel and José Manuel Barroso, the EU president, since the German chancellor has indicated that she thinks a bailout for Greece should not be discussed at Thursday’s EU summit in Brussels.
Barroso wants the Euro zone countries to use the 2 day meeting to co-ordinate a loan or number of loans that could be, if the need arose, quickly be arranged for the Greek government – if it thought it needed them. European and international financial markets have been unsettled and as a result the Euro finds itself in a state of flux because of the lack of clarity concerning Greece.
Ms Angela Merkel takes a differing view and claims that Greece is nowhere near being in danger of default and wants the question of possible aid for Greece not even be an agenda topic at this summit.
Berlin is concerned that a bailout for Greece might been seen as setting a dangerous precedent and Merkel has also raised the spectre that countries who persistently break the EU’s stability pact should and could be expelled.
However she may not simply be pretending to pander to her fragile coalition and frustrated domestic German electorate. Indeed the Greek crisis may turn into a cloud with a silver lining – an opportunity in fact for Germany.
Being the number one exporter in Europe, Germany has been hampered by a weak dollar and even weaker Chinese Yuan-Renminbi .
Now Germany has, in the interim, greatly boosted its exports because of a weaker Euro and also a German national [after a Dutch and then French head] may now be the front-runner to lead the EU’s Central Bank – namely Axel Weber, the current Bundesbank president.
Berlin traditionally has been committed to a strong currency, however the present German government is finding it very ‘easy’ to let the export sector of the German economy benefit temporarily from this crisis.
Another positive outcome of this ‘Greek crisis’ has been that Germany appears in a better position to critisize and coerce debtor nations in the Euro zone and to get their houses in order.
Without this crisit the difficult austerity measures Athens has adopted and are necessary for a recovery would have been impossible to implement. Other potential ‘financial basket-cases’ in the Euro zone -namely Ireland, Italy, Portugal and Spain – have their work cut out for them to implement thier own domestic pre-emptive measures to avoid Greece’s predicament.
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Tags: Berlin, Greek crisis
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