August 21, 2013 7:18 pm

Angela Merkel stonewalls over Greece bailout

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Angela Merkel©Reuters

Angela Merkel

Angela Merkel, the German chancellor, tried on Wednesday to damp down debate in her re-election campaign over the need for a new bailout for Greece.

The chancellor’s predecessor, Gerhard Schröder, accused Ms Merkel of lying to voters about the issue.

The chancellor refused to be drawn in a television interview on how much money might be involved in any new rescue package, insisting that it would be impossible to know before 2014, when Greek progress with its reform programme would be reassessed.

“I cannot say what sums are necessary,” Ms Merkel said on SAT-1, the private broadcaster. “We can only decide in the middle of next year.” The chancellor added that “Greece has been making very, very good progress in recent months and we want that progress to be continued.”

Her stonewalling was matched by a government damage-limitation exercise after Wolfgang Schäuble, finance minister, admitted on Tuesday that there would have to be another Greek bailout next year.

Ms Merkel’s chief spokesman, Steffen Seibert, insisted that there was “nothing new” in what Mr Schäuble had said. The Greek government was making progress with its budget cuts and economic reforms, and “the programme is on track”, he added.

The German government view was backed in Athens by Jörg Asmussen, executive board member of the European Central Bank, who said Mr Schäuble was simply restating what had been decided by eurozone finance ministers in November.

“There is nothing new, and there is nothing to add,” he said. “If we look at how things unfold, we will not know before spring next year if the country has reached a primary surplus on an annual basis.”

But the German government reaction failed to prevent a surge of opposition criticism, led by Mr Schröder on his first official intervention in support of Peer Steinbrück, the Social Democratic party challenger for the job of chancellor.

“It is a big lie that Germany will not have to pay for Europe,” Mr Schröder told an SPD party rally on Tuesday night in Detmold, a thriving market town in northwest Germany. He accused Ms Merkel of deliberately keeping quiet about the need for more help for Greece.

“You cannot win the trust of people by covering up and disguising things, only by telling them the truth.”

In depth

Germany elections

Germany elections

Despite Angela Merkel’s personal popularity the battle to form a workable coalition in Berlin after September’s poll remains close

His attack was matched by Carsten Schneider, SPD budget spokesman, who said it was obvious that Mr Schäuble had “blabbed” and been pulled back by the chancellor.

“It is pitiful that Wolfgang Schäuble does not stand by what he said yesterday,” Mr Schneider said. He called on the finance minister to present comprehensive figures on the Greek fiscal position to an emergency meeting of the Bundestag budget committee.

The intervention by Mr Schröder, a vigorous campaigner and lively speaker, will revive the hopes of opposition supporters in the election campaign, where the centre-left SPD is trailing far behind Ms Merkel’s centre-right Christian Democratic Union.

The SPD urgently needs a new issue in the campaign to start closing the gap. According to the latest polls, the SPD is at least 15 percentage points behind the CDU and its Bavarian sister party, the Christian Social Union. In a Forsa poll for Stern magazine, the CDU/CSU were on 41 per cent and the SPD 22 per cent – one point below its disastrous score in the 2009 general election.

The same poll put Ms Merkel’s coalition with the liberal Free Democratic party 12 percentage points ahead of the SPD-Green party alliance, with combined support of 47 per cent – within reach of an overall majority.

If the SPD can turn the Greek issue into a major theme of the campaign, it could help close the gap. But the eurozone crisis is a difficult one for the opposition, because the SPD has backed previous bailouts and is in favour of helping Greece to stay inside the euro.

The question is more likely to help two eurosceptic parties – the Alternative for Germany, and the Free Voters’ party – who want Greece to be forced to leave the European monetary union. Although neither is polling more than 2-3 per cent, they could take votes away from the CDU and the FDP, and prevent Ms Merkel winning an outright majority for her favoured coalition.

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