German Parliament Approves Greece Bailout
On Monday the German Parliament approved the latest round of bailout funds for Greece. It’s about $170 billion worth of loans to keep Greece from defaulting on its debts. Germany’s expected to come up with most of the cash.
Up until now, German politicians have presented a pretty united front when it came to keeping Greece in the eurozone. That’s despite the fact that many Germans are fed up with giving the Greeks any more money.
But on Monday, the German tabloid Bild had this headline message for German politicians: “STOP!”
“Don’t go down this crazy path any longer.”
Meanwhile, other German papers recently carried a full page ad taken out by Greek businessmen that said, “Give Greece a Chance.”
Chancellor Angela Merkel weighed in Monday morning ahead of the parliamentary debate on the next tranche of German bailout money.
“I know there are people asking whether Greece was a bottomless pit, a hopeless case, whether it would be better for all if Greece went back to the Drachma, whether – to sum it up – the eurozone wouldn’t be better off without Greece than with Greece,” she opined. “These questions are valid. After weighing up all pros and cons I however come to the conclusion that the opportunities lying within this new package outweigh its risks.”
For two years now, Merkel and her party faithful have stuck to the idea that the eurozone is better off with Greece in it.
But cracks are now showing.
This past weekend, Merkel’s own Interior Minister suggested that Greece’s chances of recovery might be better outside the eurozone.
But Greece’s Culture and Tourism Minister, Pavlos Geroulanos, said on Monday a Greek exit, and bankruptcy, is not the way forward.
“Bankruptcy of Greece right now will cost the Greek people a lot more than the package that’s being put together by the European Union along with Greece,” Geroulanos said. “The cost of that package is nowhere near what the cost of bankruptcy would mean for the Greek people – because bankruptcy would mean a very sudden and radical reduction of the buying power of the Greek people, especially as far as goods are concerned that are coming from abroad. And the Greek economy is just as intertwined with the European economy as the German is.”
Germans, however, seem to have had just about enough.
Artur Fischer, chief executive of the Berlin Stock Exchange, said he believes most Germans understand that the kinds of austerity measures facing Greece are dreadful for the Greek people, and they do have a lot of sympathy for the trouble they have to go through.
“On the other hand,” Fischer said, “we read stories in our newspapers that the rich people, the people with money, manage to channel that money outside of Greece, and to protect it from supporting their own country.”
Over the weekend, news broke that more than 100 German tax collectors had volunteered to go to Greece to help with its tax collection problems.
“The level of trust in Greece implementing measures that they have agreed upon is plummeting in the German system,” said Thomas Kleine-Brockhoff, a senior fellow with the German Marshall fund of the United States.
“We’ve seen over the past couple of weeks, protests in Greece against this type of restricted sovereignty, the ideas for which come out of Berlin. And so the Germans are the bad guys, and German/Greek relations are at a post-war low at this point,” Kleine-Brockhoff said.
For her part, Angela Merkel said she’s still committed to keeping Greece in the eurozone.
The German opposition supports even more money for the bailout funds. And more money may, in fact, be necessary. Many in Brussels now feel that the agreed upon bailout targets won’t be enough to contain Greece’s economic troubles.
Merkel might have to go back and try to convince voters that Germany should pony up even more cash in the months ahead.
But “more money” for Greece doesn’t seem to be what Germans want.
A new poll suggests that more than 60 percent of the German public is against sending any more bailout money Greece’s way.