BBC News: Greece debt crisis puts Germany’s Merkel under pressure

_84163644_84163643.jpgBBC Berlin correspondent Jenny Hill says that Chancellor Angela Merkel is under pressure over the Greek debt crisis – and is unlikely to give much ground.
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Greece debt crisis puts Germany’s Merkel under pressure

  • 10 July 2015

Of all of its creditors, Greece owes Germany the most – €68bn (£49bn; $75bn).

So German opinion matters. If and when Greece puts a bailout deal on the negotiating table, German MPs will vote – first on whether they are prepared to let negotiations go ahead and then, later, to approve any deal. A “No” from Germany could railroad any third bailout for Greece.

And German politicians are not happy. They have already agreed to two bailout deals – the second time round many voted “Yes” reluctantly to a deal that, as one German newspaper put it, gave them “political tummy ache”.

Take Wolfgang Bosbach. He is a senior member of Angela Merkel’s conservative Christian Democrat party.

“I will not vote in favour of a third bailout package for Greece,” he says. “I voted for the first expecting the plan would work, expecting Greece to reform.

“Instead the situation got worse and worse and the liabilities for the German taxpayer keep rising.”

Frustration

That is why – as the German media puts it – Angela Merkel is “unter Druck” – under pressure.

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In private, Angela Merkel is believed to have let slip her frustration with Greek Prime Minister Alexis Tsipras
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So far Mrs Merkel has proved an astute crisis manager in relation to the Greek debt crisis

There are politicians here who openly say she should simply refuse to negotiate with Greece. Half of Germans in a recent survey say it is time for Greece to leave the eurozone.

But Mrs Merkel does not want to be the German chancellor who oversees the collapse of the eurozone.

In private, she is believed to have let slip her frustration with Greek Prime Minister Alexis Tsipras. She reportedly told a group of MPs that he has “driven his country into the wall”.

But her public approach is softer. “The door is still open to Greece,” she insisted earlier this week.

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Mrs Merkel has preferred to let Finance Minister Wolfgang Schaeuble do most of the tough talking on Greece

And that well-worn phrase, “where there is a will there is a way”, has been used repeatedly.

Arguably Chancellor Merkel can afford to maintain a more outwardly compromising stance while she leaves the tough talk to Finance Minister Wolfgang Schaeuble and her deputy chancellor.

Social Democrat leader Sigmar Gabriel said on Monday that Mr Tsipras has destroyed all bridges between Europe and Greece. He reiterated Germany’s red line – debt relief for Greece is simply not acceptable until there is concrete evidence of reform.

It is a policy which has general public approval, according to Peter Matuschek from the Forsa polling agency.

And, he says, it is a policy which also – broadly speaking – has cross-party political support.

So far the crisis has not harmed Mrs Merkel’s popularity either. Dr Matuschek says that she is perceived as a “crisis manager”.

“She’s not a politician with a vision for the next decade.” Instead, he believes she has adopted a day-to-day approach that most German voters appreciate.

So do not expect much flexibility from Berlin. Angela Merkel in particular is unlikely to give way on debt relief – even though that puts her on a crash course with International Monetary Fund Managing Director Fund Christine Lagarde.

http://www.bbc.com/news/blogs-eu-33461892

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About Uy Do

Banking System Analyst, former NTT data Global Marketing Dept Senior Analyst, Banking System Risk Specialist, HR Specialist
This entry was posted in Chancellor, Crisis, Debt Crisis, Default, EU, Germany, Greece and tagged , , , , . Bookmark the permalink.

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