Merkel Opposed to Greek Aid

Greek fiscal problems have pressured the multi nation euro in currency markets and the reaction has been strong in some quarters. Members of German Chancellor Angela Merkel’s coalition have expressed very vocal opposition to aid for Greece. A poll conducted by the German newspaper Bild am Sonntag newspaper showed that 53% of the Germans polled said that if necessary Greece should be thrown out of the European Union. Merkel has been somewhat unclear on the issue of support for Greece saying that it is up to the Athens government to fix its own problems. The poll also indicated that 67% of Germans do not want Germany or any other EU nations to give billions of credit to Greece. Michael Fuchs deputy head of Merkel’s conservatives in parliament, said in a statement to the Welt am Sonntag newspaper, “If we start now, where do we stop? I can’t explain to people on unemployment benefit that they won’t get a cent more but Greeks can draw a pension at 63.” During her first term Merkel raised the German retirement age from 65 to 67 in an attempt to control the nation’s deficit to meet European Union goals.

German Recovery Fragile

Last year Germany suffered the nation’s worst post war recession and German recovery stalled during the fourth quarter and German recovery is seen as fragile at the present time. One of Merkel’s coalition partners is even more adamant against any aid to Greece. The pro-business Free Democrats (FDP) are against aid to Greece. FDP budget expert Otto Fricke stated, “Solving this problem cannot be about aid for Greece. If anything, it’s about keeping any damage away from German tax payers.”

IMF Economist Says Helping Greece ‘Inevitable’

Former European Central Bank chief economist Otmar Issing said that any aid to Greece from EU nations would be ‘misguided.’ Issing was particularly critical of Greece’s generous pension system. Harvard University economist Kenneth Rogoff said that Germany could possible face the same problems as Greece in the future. In a statement to the Welt am Sonntag newspaper Rogoff warned, “Germany’s public finances are not on a sustainable path. There will come a time when Germany will have its own Greece problem … it won’t be as bad as in Greece, but it will be painful.” Rogoff who is a former International Monetary Fund chief economist said that helping Greece is inevitable. Rogoff stated, “As long as Germany isn’t ready to kick Greece out of the euro zone, it must help,”