Greek bailout talk ruffles German election

Published on NewsOK Modified: August 22, 2013 at 7:37 am •  Published: August 22, 2013
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BERLIN (AP) — Chancellor Angela Merkel's opponents are assailing her credibility after her finance minister said Greece will need a third bailout package — injecting Europe's debt crisis for the first time into the campaign for next month's German elections.

Germany, Europe's biggest economy, has been a central player in the crisis. It's the biggest contributor to bailouts of struggling countries and has led an austerity-heavy response that is often criticized abroad.

But with Germans largely insulated by their own healthy economy and low unemployment, there's been little incentive for anyone to make Europe a big issue in the country's Sept. 22 elections.

Until this week.

In a speech to a campaign rally Tuesday, Finance Minister Wolfgang Schaeuble said that "there will have to be a program for Greece once again."

That was a small but significant departure from previous assertions that more help is likely — but not inevitable — once Greece's current bailout expires next year.

Schaeuble's comment was received gratefully by Merkel's center-left opponents, who have struggled all summer to land any blows on the popular conservative.

Merkel's predecessor, Gerhard Schroeder, suggested at a rally of his opposition Social Democrats that the governing coalition had tried to hide the inevitability of a new Greek bailout and said "Germany will have to pay for a Europe that is not as steady on its legs as we are."

His party demanded that Merkel say before the elections how much more aid Greece — to which other European nations and the International Monetary Fund so far have committed 240 billion euros ($320 billion) in loans — will need.

"Mrs. Merkel has pursued a strategy of hiding the whole issue of Europe as far as possible until the election on Sept. 22, keeping it out of the election campaign," said her challenger, Peer Steinbrueck.

Officials insisted Schaeuble was really saying nothing new. Merkel herself coolly said she was "a bit surprised" by the reaction — asserting that "everyone knew what Schaeuble said about Greece." She also said that it would be clear only "in the middle of next year" how much more money Athens might need.

And she insisted that further aid won't take the form of a write-down on Greece's debt following a massive deal last year in which private sector creditors agreed to cut the value of their bond holdings.

That Greece's finances remain strained has long been an open secret, but many European politicians have avoided discussing an unpopular new bailout. It's unclear whether Schaeuble's comment was unplanned or whether the veteran minister calculated that, given widespread speculation Greece will need more aid, it was better to say so publicly sooner rather than later.

Schaeuble's Dutch counterpart, Jeroen Dijsselbloem, who leads meetings of the 17-nation eurozone's finance ministers, sent similar signals. In an interview Thursday with the newspaper Het Financieele Dagblad he said "the problems in Greece won't be solved in 2014, so something more will have to happen." The French government, however, has shied away from making such predictions.



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