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 European Macroeconomics & Governance Tags & Topics

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.

View comments
Read about event More on this topic

Past Event

Past Event

Transition for all: equal opportunities in an unequal world

How inclusive is growth in transition countries? Post-communist countries are becoming more prosperous but many people are being left behind, risking setbacks in political and economic development.

Speakers: Heather Grabbe, Zsolt Darvas, Katarina Mathernova, Sergei Guriev and Jonathan Charles Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 7, 2016
Read about event More on this topic

Past Event

Past Event

Game Over – The Inside Story of the Greek Crisis -Drawing the broader lessons for Europe

Solvay Brussels School and Bruegel are co-organizing an event at which George Papakonstantinou and André Sapir will discuss the Greek crisis and its social and economical impact over the last 6 years.

Speakers: André Sapir, Guntram B. Wolff and George Papakonstantinou Topic: European Macroeconomics & Governance Location: Avenue Franklin Roosevelt 42 Brussels, 1050, Ixelles Date: December 6, 2016
Read article More on this topic More by this author

Blog Post

Pia Hüttl

Macroeconomics in the crossfire (again)

What’s at stake: After a first go at macroeconomics and its flaws a year ago, Paul Romer kicked off the debate again with a recent essay on how macroeconomics has gone backwards. The way that this debate, along with the debate of the role of economics in general, feeds into today's election woes, has also attracted attention in the blogosphere.

By: Pia Hüttl Topic: European Macroeconomics & Governance Date: December 5, 2016
Read article More on this topic More by this author

Blog Post

Silvia Merler

Financial implications of the Italian referendum

On Sunday, Italy will held a constitutional referendum whose implications for the political stability of the country are uncertain. Right after the referendum, Italy’s oldest and most troubled bank - Monte dei Paschi di Siena - is expected to complete a very important and sizable capital raise. Here we look at the situation and implications of this critical juncture.

By: Silvia Merler Topic: European Macroeconomics & Governance Date: December 2, 2016
Read about event More on this topic

Past Event

Past Event

Labour mobility after Brexit

What will Brexit mean for the free movement of workers between the UK and the EU?

Speakers: Lindsey Barras, Zsolt Darvas, Jonathan Portes and Klaus F. Zimmermann Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 2, 2016
Read article Download PDF

Policy Contribution

pc-20-16_page_01European Parliament

What impact does the ECB’s quantitative easing policy have on bank profitability?

This Policy Contribution shows that the effect of the ECB’s QE programme on bank profitability has not yet had a dramatically negative effect on bank operations.

By: Maria Demertzis and Guntram B. Wolff Topic: European Macroeconomics & Governance, European Parliament, Parliamentary Testimonies Date: November 30, 2016
Read article

Blog Post

Giuseppe Porcaro
hsbeziyq

Tweeting the Italian referendum: the hashtag war

We are monitoring an aggregate of twitter hashtags in the run up to the Italian Constitutional referendum of 4 December 2016.

By: Giuseppe Porcaro, Henrik Müller and Gerret von Nordheim Topic: European Macroeconomics & Governance Date: November 29, 2016
Read article More on this topic More by this author

Blog Post

Silvia Merler

The Italian referendum

What’s at stake: on 4 December, Italy will hold a referendum on a proposed constitutional reform approved by Parliament in April. The reform, which was designed in tandem with a new electoral law, aims to overcome Italy’s “perfect bicameralism” by changing the structure and role of the Italian Senate. It also changes the distribution of competences between the state and regions. After the shocks of Brexit and the US election, polls are now drifting towards a defeat of the government’s position in Italy.

By: Silvia Merler Topic: European Macroeconomics & Governance Date: November 28, 2016
Read about event More on this topic

Upcoming Event

Jan
9
09:30

Can migration work for all in Europe?

On 9 January Bruegel together with the IMF is organizing a conference on migration and whether it can work for all in Europe.

Speakers: Jorg Decressin, Gianpiero Dalla Zuanna, David Lipton, Alessandra Venturini and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

Zsolt Darvas

Income inequality has been falling in the EU

The properly measured EU-wide Gini coefficient of disposable income inequality shows that inequality in the EU as whole declined in 1994-2008, after which it remained broadly stable. However, within the EU, there are large differences in income inequality which require policy action.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: November 23, 2016
Read article More on this topic

Blog Post

Pia Hüttl
Silvia Merler

An update: Sovereign bond holdings in the euro area – the impact of QE

Since the ECB’s announcement of its QE programme in January 2015, national central banks have been buying government and national agency bonds. In this post we look at the effect of QE on sectoral holdings of government bonds, based on our recently updated dataset.

By: Pia Hüttl and Silvia Merler Topic: European Macroeconomics & Governance Date: November 22, 2016
Read about event More on this topic

Past Event

Past Event

Vision Europe Summit 2016

The 2016 Vision Europe Summit is titled "Redesigning European Migration and Refugee Policy" and will be held in Lisbon on 21-22 November 2016.

Topic: European Macroeconomics & Governance Location: Lisbon Date: November 21, 2016
Load more posts