Aid to Greece Weighs on German Campaign By JACK EWING and NIKI KITSANTONIS Published: August 21, 2013 FRANKFURT — Members of Chancellor Angela Merkel’s government struggled Wednesday to prevent Greece and its problems from disrupting an otherwise comfortably dull German election campaign, after comments by the finance minister raised fears that voters might be asked to help pay for another round of aid. “There’s nothing new,” Steffen Seibert, Ms. Merkel’s spokesman, said a day after Wolfgang Schäuble, the German finance minister, created a political firestorm by suggesting that a third aid package for Greece was inevitable. The brouhaha coincided with a visit to Athens on Wednesday by Jörg Asmussen, a member of the executive board of the European Central Bank and former top aide to Mr. Schäuble. Speaking after talks with Yannis Stournaras, the Greek finance minister, Mr. Asmussen said a third rescue package for Greece was “not discussed” and would not be until spring at the earliest. Despite protests by representatives for Mr. Schäuble that he had previously signaled that Greece would need more aid, his comment on Tuesday aggravated the already fraught relationship between Greece and Germany and provided ammunition for opponents of Ms. Merkel desperate for a way to dent her solid lead in the polls. Peer Steinbrück, chancellor candidate for the opposition Social Democrats, accused Ms. Merkel of concealing the true cost of Greek aid from German voters until after national elections on Sept. 22. Gerhard Schröder, a former chancellor unseated by Ms. Merkel, accused her of “a big lie.” The episode also provided Greek political fodder. Newspapers in Greece, where Germany is blamed for severe cuts in government spending, reacted with sarcastic headlines, including “Schäuble threatens new aid.” Mr. Asmussen told reporters on Wednesday that his trip to Athens had been long planned, but the timing helped feed the controversy stirred by Mr. Schäuble’s remarks about the need for another aid package. Mr. Schäuble, a stalwart of Ms. Merkel’s conservative Christian Democrats, had said on several occasions in recent months that another aid package for Greece was possible and even likely. But observers thought they detected a shift in tone when, while campaigning Tuesday near Hamburg, Mr. Schäuble said that “there will have to be another program for Greece,” according to German news reports. Greece and the cost of saving it remains a sore point for German voters and a potential weakness for Ms. Merkel. While her party is almost certain to finish first in national parliamentary elections in September, she is unlikely to win an absolute majority and will need to form a governing coalition, perhaps with the Social Democrats. Any loss of votes could weaken her bargaining position. German government officials stressed that they remain opposed to any further debt relief for Greece and insisted that Mr. Schäuble was not signaling any change in German government policy. “The minister has repeatedly indicated that Greece’s problems cannot be solved overnight,” his office said in a statement Tuesday. Still, Greece was the central topic at the government’s regular news conference in Berlin on Wednesday after a meeting of Ms. Merkel’s cabinet. Mr. Seibert, her spokesman, said Greece was not discussed at the meeting “because there was no occasion to.” Martin Kotthaus, Mr. Schäuble’s spokesman, said, “It has always been clearly communicated that, if after 2014 the Greeks have further needs, we’ll see what can be done.” Mr. Asmussen, the highest-ranking German in the E.C.B. and a formerly close confidant of Mr. Schäuble, said in Athens that further support for Greece was possible if the country lived up to promises it made in return for aid and if it met spending targets. Greece “must continue the reforms it has started,” Mr. Asmussen said. In talks with Greek leaders, he said, “we focused on making the current program a success.” Mr. Asmussen, who was also to meet later Wednesday with Prime Minister Antonis Samaras, stressed the importance of creating more growth and jobs. He said Greece’s unemployment rate — 27 percent overall and 65 percent for those younger than 25 — was not acceptable. Still, Mr. Asmussen also said there was evidence of the “first signs of stabilization.” Officially, Mr. Asmussen was in Athens to check on Greece’s progress in implementing economic reforms pledged to the E.C.B., the European Commission and the International Monetary Fund — the so-called troika of lenders that have extended Greece two bailouts totaling €240 billion, or $321 billion, since the spring of 2010. Earlier in the day Wednesday, Mr. Asmussen met with George Provopoulos, the governor of the Bank of Greece, to discuss the state of Greek banks, which recently received new capital. The prospect of additional aid from Germany, which as the largest country in the euro zone has paid the most to help Greece, was greeted with anything but relief in the Greek news media. Headlines in daily newspapers reflected fears of Greece plunging further into debt, and being bound more tightly to diktats from Berlin. Other headlines included: “Greece goes to the polls (the German ones),” and “The shackles of a new loan and a new memorandum.” And yet, any new bailout for Greece is likely to be but a small fraction of the previous packages. The I.M.F. has estimated that Greece will have a funding shortfall of around €10.9 billion for 2014 and 2015. Finance Ministry officials have suggested the shortfall will be smaller than the I.M.F. estimate, which is subject to revision, but they have been exploring ways to plug the gap. Some of the funding is likely to come from leftover money from the recapitalization of Greek banks and a possible new reduction to the interest rate that Greece pays on its loans. A return to international bond markets in 2014 would enable Greece to raise additional revenue. The hope is that Greece would need to tap its euro zone partners for only an additional €5 billion in loans. Ms. Asmussen’s visit came as a transitional public television service began transmitting news programs more than two months after Mr. Samaras unilaterally closed the state broadcaster, ERT, triggering a political crisis. Last week, 577 employees were hired to staff an interim broadcaster that is to operate until a permanent replacement for ERT is set up. Dismissed ERT employees continue to occupy the broadcaster’s old offices, airing pirate programming via satellite, and have pledged to continue their sit-in until the original ERT is restored. The transitional service is being broadcast from an old ERT studio in a different part of Athens. Niki Kitsantonis reported from Athens.
Posted on: Thu, 22 Aug 2013 04:41:30 +0000
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