August 13, 2012
Over the last few weeks, a range of German policymakers have fired broadsides against further German involvement in the eurozone crisis, and against further aid to Greece in particular. Referring to September’s troika report on Greece, Michael Fuchs – the deputy parliamentary leader of Angela Merkel’s CDU party – yesterday told Handelsblatt that:
“Even if the glass is half full, that won’t be sufficient for a new aid package. Germany cannot and will not agree to that. We reached the point where the Greeks must show they are capable of delivering a shift long ago.”
Last week, Horst Seehofer, Prime Minister of Bavaria and leader of the CSU, the Bavarian sister party and coalition partner of Angela Merkel’s CDU (which has been getting increasingly agitated by the eurozone bailouts), proposed a series of referenda:
“We must involve the people… First of all: on the transfer of important competences to Brussels. Secondly: on the accession of new states to the European Union. And thirdly: on German financial aid to other EU states.”
In particular Seehofer cited debt pooling such as eurobonds or a debt redemption fund, adding that “with the CSU there won’t be any United States of Europe”.
Merkel’s other coalition partner, the liberal FDP, is also stepping up its rhetoric, with its leader and deputy Chancellor, Philipp Rösler and also its leader in the Bundestag, Rainer Brüderle, saying they were reconciled with a Greek euro exit. Bavarian Economy Minister Martin Zeil has gone even further arguing that:
“…a country needs to leave the euro, when it doesn’t fulfil its duties. If necessary, two or more [countries] could leave.”
From the other side of the political spectrum, former German Finance Minister Peer Steinbrück (SDP) last month stated that:
“in certain cases, I have increasing doubts whether all countries will be able to be kept inside the eurozone (…) I can see how certain countries will be unable to close their competitiveness gaps [with Germany]“
However, the SPD have also recently publicly come out in favour of eurozone debt pooling – albeit it with strict conditionality in terms of national financial policy-making.
Otmar Issing, former chief economist of the ECB, added his voice to the chorus, saying some eurozone member states might have to leave:
“Everything speaks in favour of saving the euro area [however] how many countries will be able to be part of it in the long term remains to be seen.”
The question is whether all of this is rethoric, or the beginning of something else.Author : Open Europe blog team