Blog Post

Views on Grexit: a summary of German media

According to the Spiegel on 22 July  the IMF signalled to EU leaders that it would not participate in further support for Greece. Countries like the Netherlands and Finland have made the involvement of the IMF a prerequisite for their aid. This review looks at recent voices in Germany on the so-called Grexit, which appears […]

By: Date: July 24, 2012 Topic: European Macroeconomics & Governance

According to the Spiegel on 22 July  the IMF signalled to EU leaders that it would not participate in further support for Greece. Countries like the Netherlands and Finland have made the involvement of the IMF a prerequisite for their aid. This review looks at recent voices in Germany on the so-called Grexit, which appears to become less of a taboo than before.

The Süddeutsche Zeitung (SZ) reports on 23 July that the Federal government rejects additional financial aid for Greece. According to government sources it is “inconceivable that Angela Merkel asks once again for permission to the German Bundestag for a third aid package for Greece” as Merkel already struggled to unify her coalition in recent parliamentary decisions on the euro debt crisis. However, Der Spiegel reports that the Federal government says that it has no information about the IMF refuting aid to Greece and that it will hold any decision until the publication of the Troika report on the implementation of reforms in Greece due in autumn 2012. Bavarian Prime Minister Horst Seehofer (CSU) also rejects a new rescue package for Greece. According to him, Europe has already gone “to the limit of all justifiable.” 

The German Minister of the Economy Philip Rösler gave on 22 July an interview to the ARD , where he states that he hardly sees any chances for a success of the Greek Reform Programme – and in consequence for the Greek membership in the euro zone. A Grexit “has lost its scare factor”. He is “more than sceptical” regarding the implementation of the requirements of the Troika as prerequisite for further financial aid. “If Greece does not fulfil its obligations, there will be no more payments” said the Minister. In this case, the country would be insolvent, what would trigger probably a discussion in Greece itself.  In Rösler’s words: “The Greek will then finally come to the conclusion that it would be maybe cleverer to exit the euro zone”. Rösler was heavily critizised in his own party for these statements. According to the Spiegel many FDP members even call his behaviour “unprofessional” and try to play down Rösler’s statements, such as Michael Link (Minister of state in the Foreign Office for European Affairs) who says that an exit out of the euro zone cannot be forced. However, the Secretary General of the FDP says that an exit of Greece from the euro zone “could create confidence in the markets.” And, according to the Spiegel on 23 July , FDP chef Rainer Brüderle wants to advance the publication of the Troika report.

According to Die Welt, Germany’s Finance Minister Wolfgang Schäuble argues implicitly against giving Greece more time to implement the agreed reforms (Greek Prime Minister Antonis Samaras had asked to shift the commitments by two years). “If there is a delay regarding reforms, Greece will have to make them up”, Schäuble told to the BILD Newspaper. However, he declines to make any prediction on a possible Grexit.

SPD leader Sigmar Gabriel warns about the consequences of a Grexit. Germany would have to face after a Grexit and calls for a little more time for Greece for the implementation of reforms. Green Party leader Jürgen Trittin calls to wait until the assessment of the Troika. Regarding the statements of CDU and FDP, he calls them “hysterical”. The former Minister of Finance Peer Steinbrück, SPD member, states in an interview to the Bild am Sonntag that “in some cases, he had growing doubts that all countries could be held in the euro zone”.

Claus Hulverscheidt writes on 22 July 2012 in the SZ that, in order to “pull the plug” in Greece, it would be either necessary for the Greek to save more, or for the Europeans to give more money. Both are impossible and therefore only bankruptcy and Grexit remain as options. However, this is risky, notably for Greece. Moreover, from a legal point a view, there is no possibility to “throw the Greek out of the euro zone”. Only the ECB would have the indirect means to stop the payments and by doing this to force Samaras to exit. This would involve tremendous risks for the Greek government, even bigger ones compared to those for the remaining euro zone countries. However, he thinks that this step is necessary and underlines that the Greek themselves should be blamed for the situation. It would be very ironic if the former “Blockadepolitiker” (blockade politician) Samaras may be the one filing a petition for bankruptcy.

Hugo Müller-Vogg appreciates in a comment in the BILD on 23 July (“Acropolis Adieu”) the recent statements of the IMF (see above). This signal was overdue and underlines that Greece is neither able nor willing to solve its problems: the political caste does not dare to ask the rich to pay, the bureaucracy is unable to privatise unprofitable state enterprises, and the tax administration is inefficient and corrupt. “The IMF statements, finally, make is easier for the donor countries to say: Acropolis adieu, you have to go!”

Gérard Bökenkamp on FreieWelt.net supports Rösler’s statements and says that he has the “logic on his side” as the German Chancellor and the Minister of Finance – officially – still exclude a bankruptcy of Greece. Excluding a bankruptcy of Greece would mean that there is no way to enforce obligations against Greece.

In the Westdeutsche Allgemeine Zeitung Gerd Höhler writes about the reaction of the Greek in the face of the threat of a national bankruptcy. The actual cause of the misery in Greece is its political system itself, made of corruption and favors. Unless the Greek politicians do not dare to break these structures, the country won’t be able to cope with its problems. However, even in the face of the threat of a national bankruptcy, there is no sign of a reform jerk…

Thomas Kröter writes in the Kölner Stadtanzeiger on 22 July that Angela Merkel wanted to involve the IMF on the “Acropolis Action” in order to involve an institution that is less exposed to political pressure. The IMF was thought to be the “technical backbone” for the Troika that checks the status of Greek reforms. And it is not by hazard that the Federal Ministry of Finance already had prepared plans for a euro zone without Greece. Remains the question: who will be the winner of a Grexit given that Spain may be the next Greece?

Udo Harms (Neue Presse Hannover) comments Rösler’s statements. Given Rösler’s unfavourable situation in the Federal government, bad popularity ratings, mobbing within the FDP, no practical results, his recent statements are at best clumsy, at worst a calculus in order to improve his tattered image in the German public opinion. Harms thinks that after a Grexit, the risk of contagion to Spain and Italy is very present. In this case, the euro could be basically forgotten and also the exporting nation Germany will be weakened…

Egbert Nießler of the Berliner Morgenpost (subscribed version) thinks that a Grexit is not only about Greece, but could also be harmful for the German export oriented economy….


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.


Warning: Invalid argument supplied for foreach() in /home/bruegelo/public_html/wp-content/themes/bruegel/content.php on line 449
View comments
Read article Download PDF More on this topic

External Publication

Analysis of developments in EU capital flows in the global context

The monitoring and analysis of capital movements is essential for policymakers, given that capital flows can have welfare implications. This report, commissioned by the European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union, aims to analyse capital movements in the European Union in a global context.

By: Grégory Claeys, Maria Demertzis, Konstantinos Efstathiou, Inês Goncalves Raposo, Alexander Lehmann and David Pichler Topic: European Macroeconomics & Governance Date: January 17, 2019
Read article More on this topic More by this author

Podcast

Podcast

Director's Cut: The economics of no-deal Brexit

Bruegel director Guntram Wolff is joined by senior fellow Zsolt Darvas to rake through the possibilities and probabilities inherent in a no-deal Brexit scenario, covering trade, the Irish border, citizens' rights and the EU budget.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: January 16, 2019
Read about event More on this topic

Upcoming Event

Jan
24
12:30

Towards a new social contract

This event will look at a a proposal for a new social contract put forward by the World Bank.

Speakers: Maurizio Bussolo, Zsolt Darvas, Ruby Gropas and Bernadette Ségol Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More by this author

Blog Post

What 2019 could bring: A look inside the crystal ball

Economic performance prospects in Europe, the US and Asia in 2019. We start off by reviewing commentaries and predictions about the euro zone, which many commentators expect to perform below potential as uncertainties continue to dampen a still robust recovery.

By: Michael Baltensperger Topic: European Macroeconomics & Governance, Global Economics & Governance Date: January 14, 2019
Read article More on this topic More by this author

Blog Post

EU budget implications of a no-deal Brexit

A no-deal Brexit would mean the UK’s contributions to the EU budget fall to zero as of March 30th 2019. The author here calculates an estimate of the budget shortfall that would have to be covered in this case, and how the burden would fall across different member states.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: January 14, 2019
Read article Download PDF More on this topic More by this author

Policy Contribution

The implications of no-deal Brexit: is the European Union prepared?

The author, based on a note written for the Bundestag EU Committee, is exploring the possible consequences of a no-deal Brexit for the EU, assessing preparations on the EU side and providing guidance on the optimal strategy for the EU, depending on the choices made by the United Kingdom.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: January 14, 2019
Read article Download PDF More by this author

Parliamentary Testimony

German Bundestag

The implications of no-deal Brexit: is the EU prepared?

Hearing on Brexit in the EU Committee of Bundestag on 14 January 2019, exploring the possible consequences of a no-deal Brexit for the EU and assessing preparations on the EU side.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance, German Bundestag, Testimonies Date: January 14, 2019
Read article More on this topic More by this author

Opinion

Fifty shades of yellow

Who are the Yellow Vests? What are the true roots of their uprising? And what do they want? Six weeks after they started rocking French politics and a month after violence erupted on the Champs Élysées, these questions are still hotly debated in France.

By: Jean Pisani-Ferry Topic: European Macroeconomics & Governance Date: January 10, 2019
Read article More by this author

Podcast

Podcast

Director’s cut: Wrapping up 2018

With 2018 drawing to a close, and the dawn of 2019 imminent, Bruegel's scholars reflect on the economic policy developments we can expect in the new year – one that brings with it the additional uncertainty of European elections.

By: The Sound of Economics Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Date: December 20, 2018
Read article Download PDF More on this topic

Policy Contribution

The euro as an international currency

Is a more important international role for the euro worth pursuing? What measures would achieve this result, if it is worth pursuing?

By: Konstantinos Efstathiou and Francesco Papadia Topic: European Macroeconomics & Governance Date: December 18, 2018
Read article More on this topic More by this author

Blog Post

Brexit: Now for something completely different?

The life of Brexit. After a week of ECJ rulings, delayed votes, Theresa May’s errands across Europe and the vote of no confidence, we review the latest economists’ opinions to try to make sense of what has changed and what hasn’t.

By: Inês Goncalves Raposo Topic: European Macroeconomics & Governance Date: December 17, 2018
Read article More on this topic

Opinion

Can virtual currencies challenge the dominant position of sovereign currencies?

Marek Dabrowski and Lukasz Janikowski analyse why private money has historically failed in competition against sovereign currencies and what it means for modern virtual currencies, such as Bitcoin.

By: Marek Dabrowski and Łukasz Janikowski Topic: European Macroeconomics & Governance Date: December 15, 2018
Load more posts