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 More on this topic More by this author

Blog Post

The latest European growth-rate estimates

The quarterly growth rate of the euro area in Q1 2018 was 0.4% (1.5% annualized), considerably higher than the low growth rates of the previous two quarters. This blog reviews the reaction to the release of these numbers and the discussion they have triggered about the euro area’s economic challenges.

By: Konstantinos Efstathiou Topic: European Macroeconomics & Governance Date: May 20, 2019
Read about event More on this topic

Upcoming Event

May
21
10:30

Europe after Sibiu: Towards differentiated integration?

A comprehensive follow-up to the Informal European Council in Sibiu, Romania.

Speakers: Andrew Duff, John Erik Fossum, Paweł Karbownik and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Upcoming Event

May
28
12:30

The Ukrainian economy: the way forward after a year of political turbulence

What can Ukraine do to foster economic growth? How can the EU and other international partners help Ukraine with this process?

Speakers: Olena Carbou, Marek Dabrowski, Elena Flores, Ivan Miklos and Hlib Vyshlinsky Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article Download PDF More by this author

Book/Special report

Bruegel annual report 2018

The Bruegel annual report provides a broad overview of the organisation's work in the previous year.

By: Bruegel Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Date: May 16, 2019
Read about event More on this topic

Past Event

Past Event

CANCELLED: Future of taxation in the EU

Due to a previously unannounced air traffic controllers strike in Belgium, the Prime Minister Morawiecki is unable to land in time for the event. We apologise for any inconvenience.

Speakers: Marie Lamensch, Mateusz Morawiecki and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 16, 2019
Read article More on this topic

Blog Post

Germany’s even larger than expected fiscal surpluses: Is there a link with the constitutional debt brake?

Germany is having a political debate on the adjustment of its budgetary plans due to revised forecasts, and an academic debate on the debt brake. Yet, since 2011, general government revenues and surpluses have been systematically and significantly higher than forecast. The German surplus reached 1.7% of GDP in 2018. This bias did not exist from 1999-2008 before the introduction of the debt brake. While the IMF also got its forecasts of German surpluses wrong, the extent of the bias is larger for the German government’s forecasts. These data suggest that the political debate should focus on the debt brake and its implementation rather than on how to close the budgetary ‘hole’.

By: Catarina Midoes and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: May 13, 2019
Read about event More on this topic

Upcoming Event

Jun
17
12:30

Role of national structural reforms in enhancing resilience in the Euro Area

At this event Gita Gopinath, Chief Economist at the IMF will discuss the role of national structural reforms in enhancing resilience in the Euro Area

Speakers: Maria Demertzis, Gita Gopinath and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More by this author

Blog Post

Spitzenkandidaten visions for the future of Europe's economy

What are the different political visions for the future of Europe’s economy? Bruegel and the Financial Times organised a debate series with lead candidates from six political parties in the run-up to the 2019 European elections.

By: Giuseppe Porcaro Topic: European Macroeconomics & Governance, Global Economics & Governance, Innovation & Competition Policy Date: May 8, 2019
Read article More on this topic More by this author

Opinion

When facts change, change the pact

“When facts change, I change my mind,” John Maynard Keynes famously said. With long-term interest rates currently near zero, the European Union should reform its fiscal framework to allow member states to increase their debt-financed public investments.

By: Jean Pisani-Ferry Topic: European Macroeconomics & Governance Date: May 1, 2019
Read article More on this topic More by this author

Blog Post

EU enlargement 15th anniversary: Upward steps on the income ladder

Since their accession to the EU 15 years ago, the incomes of most central Europeans have increased faster than the incomes of longer-standing members and, thereby, they moved upwards in the EU distribution of income. Yet the very poorest people have not progressed in some countries.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: April 30, 2019
Read article Download PDF More on this topic

Working Paper

What drives national implementation of EU policy recommendations?

The authors use a newly-compiled dataset to investigate whether and why European Union countries implement the economic policy recommendations they receive from the EU.

By: Konstantinos Efstathiou and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: April 25, 2019
Read article Download PDF More by this author

External Publication

European Parliament

Taking stock of the Single Resolution Board: Banking union scrutiny

The Single Resolution Board (SRB) has had a somewhat difficult start but has been able to learn and adapt, and has gained stature following its first bank resolution decisions in 2017-18. It must continue to build up its capabilities, even as the European Union’s banking union and its policy regime for unviable banks continue to develop.

By: Nicolas Véron Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: April 18, 2019
Load more posts