AGREEMENT on the conditions for the €45 billion loan to Greece was just a matter of days away, the European Commission said as several countries turned against Germany and its hard line on the Mediterranean country.
The French Finance Minister Christine Lagarde, in a thinly veiled reference to the public row in Germany, said that it could be seen as posturing for the sake of public opinion. She warned that time was of the essence in agreeing the final terms for the joint eurozone-IMF loan for Greece and added that the eurozone will stand behind Greece.
Italian Foreign Minister Franco Frattini said he was worried by some of the rigidities Germany was insisting on. He said that helping Greece was to help maintain confidence in the eurozone and prevent attacks on other countries.
German Chancellor Angela Merkel appeared to try to take some of the sting out of the attacks on Greece as the ongoing row in her country helped push Greece’s borrowing costs to a 12-year peak and has affected the value of the euro against the dollar. It also widened the spreads for several countries, including Greece, Portugal and Italy.
"Germany will help if the appropriate conditions are met. Germany feels an enormous obligation towards the stability of the euro. If Greece is ready to accept tough measures, not just in one year but over several years, then we have a good chance to secure the stability of the euro for us all", she said.
Dr Merkel fears her party could lose a regional election in the state of North Rhine-Westphalia on May 9 that is vital to her party retaining control of the lower house of parliament. On top of this the opposition Social Democrats said they would not support a quick approval in the parliament of the aid for Greece, although they said they would not reject it.
Finance Minister Wolfgang Schaeuble has taken a very tough line against Greece, but said yesterday that Berlin aimed to free up financial support before Athens had to refinance a €8.5bn bond before May 19.
European Commission Economics chief Ollie Rehn went to Berlin yesterday for discussions with Mr Schaeuble. A spokesperson for Mr Rehn said the loan was a "done deal". "Germany is on board politically".
He added he did not see anything in the pronouncements coming from Germany that would stand in the way of the eurozone’s commitment to Greece going ahead.
The emphasis was different on some aspects he conceded, but added, "It’s just a matter of days and all the parties are committed to finishing as quickly as possible".
The Greek Finance Minister, George Papaconstantinou, who had a series of meetings during the G20 Finance Ministers and IMF spring meeting over the weekend in New York with IMF and EU officials, said that his country would commit to further austerity measures.
On top of the massive budget cuts made by the Socialist Greek government over the past few months, the EU and the IMF have also insisted on further cuts, and not just this year, but over the following two years of the loan, 2011 and 2012.
a d v e r t i s e m e n t
This appeared in the printed version of the Irish Examiner Tuesday, April 27, 2010
