Sunday, March 21, 2010

Germans Oppose Assistance to Greece, Poll Says

Germans oppose Greek aid, poll shows

By Ralph Atkins in Frankfurt and Quentin Peel in Berlin
Published: March 21 2010 22:00

Fierce German resistance to helping crisis-hit Greece has emerged in a Financial Times opinion poll that strengthens the hand of Angela Merkel, the chancellor, hand before a possible European showdown this week over financial aid for Athens.

Germans overwhelmingly opposed offering financial support to Greece as it struggles to control its public sector deficit and are strikingly more hostile than other Europeans, including the British, the FT/Harris poll showed. Almost a third of Germans believed Greece should be asked to leave the eurozone.

Further highlighting flagging support for the euro, some 40 per cent of Germans also thought Europe’s biggest economy would be better off outside the single currency – a significantly higher level of scepticism than in France, Spain or Italy.

The results follow a warning on Sunday by Ms Merkel against raising “false expectations” in financial markets of a eurozone bail-out package for Greece.

In an interview on German radio which appeared to put her at odds with José Manuel Barroso, European Commission president, she insisted that Greece had not asked for money and no decision had been taken.

The subject was not even on the agenda for a summit of European Union leaders in Brussels on Thursday, she said.

Mr Barroso issued a statement on Friday that called on EU leaders to reach an explicit agreement this week. He warned that a lack of clarity was unsettling the markets. A likely solution would be a co-ordinated package of bilateral loans.

Silvio Berlusconi, Italy’s prime minister, said on Sunday he was “absolutely in favour” of EU help for Greece.

Ms Merkel’s interview is understood to have been recorded before Mr Barroso’s intervention, but it still represents the strongly held view in Berlin that Greece must put its drastic budget austerity programme into effect before any financial support can be agreed.

“I do not see Greece needs money at the moment and the Greek government has confirmed that,” Ms Merkel said. “We do not want to create unrest in the markets by raising false expectations.”

The German chancellor reiterated the German opinion that tougher sanctions were needed to police budget discipline in the eurozone, including a view that countries could be expelled from membership if they persistently offend against the stability and growth pact.

Berlin is also fending off calls for its economic policies to be directed more at boosting domestic demand with the aim of reducing the country’s large trade surplus.

In a letter to the FT published on Monday, Ulrich Wilhelm, government spokesman, said the discussion “ignores the fact that Europe as a whole must become more competitive” and warned that “a less stability orientated policy in Germany would damage the eurozone as a whole”.

His comments amount to implicit criticism of Christine Lagarde, France’s finance minister, who asked last week in an FT interview if countries with surpluses could “do a little something?”

Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.

No comments: