Euro crisis opens old wounds for Greece, Germany
20 October CNN
A country's economy devastated, unemployment endemic and suicides
rising this is the reality in Greece, and there is seemingly no end in
sight. Greece the birthplace of democracy is now reliant on eurozone
bailouts and subject to political decision-making in Brussels and
Berlin. Last week, Athenians marched in the streets to make it clear
German Chancellor Angela Merkel in her first visit to the Greek capital
since 2009 was not welcome. Merkel met with Greek Prime Minister Antonis
Samaras to assess the country's economic health as it attempts to drive
through more austerity measures to secure further bailout money.
In her brief visit, she pledged German support for Greece but made it
clear that Greece cannot and therefore will not yield on its austerity
reforms. Rooftop snipers and 7,000 Greek police were deployed to keep
the protests under control. Protesters bearing swastika flags were kept
away from Syntagma Square, the focal point for demonstrators during the
crisis. It was here, six-months ago, that a Greek pensioner took his own
life outside parliament citing austerity measures for his desperation.
The talks between Merkel and Samaras were just the latest episode
between two countries with a fraught and tumultuous history. Some
demonstrators evoked bitter memories of the brutal Nazi occupation of
Greece from 1941 to 1944, when thousands of Greeks were killed.
It was only in 1951 that the European Union began to take shape
through the Treaty of Paris and the European Steel and Coal Community.
The treaty signed by six nations Belgium, France, West Germany, Italy,
Luxembourg and the Netherlands was intended to create lasting economic
and political stability for a continent ravaged by war.
Three days after Merkel left Greece, the European Union won the Nobel
Peace Prize for restoring harmony to much of Europe. Despite the award,
relations between countries particularly in northern and southern Europe
have been tested by the crisis.
Spyros Economides, a senior lecturer in international relations and
European politics at the London School of Economics, said Greeks are
"not very positive at all" in their views toward Germany. He told CNN:
"Partly it's a generational thing for those who remember World War II
and the consequences, but it's also younger people who are unemployed
and suffering economic dislocation, which they pin squarely on other
people's shoulders, in this case the Germans. "While the visit from
Merkel intended to strengthen eurozone unity quashed any immediate fears
of a '"Grexit" from the euro, many in Europe wouldn't be disappointed to
see them go, according to Economides.
"There will be a lot of people in the European institutions and
national capitals around Europe who will say, if the Greeks decide to
leave the eurozone, then so be it. Good riddance," he said. To stay, the
Greeks are coming under intense pressure from eurozone peersled by
Germany to implement further austerity measures of 13.5 billion euros
[$17.7 billion].Economides explained that the projected cuts could break
down into 11.5 billion euros worth of cuts from pensions and wages as
well as the sale of state property and the remaining 2 billion euros
from additional taxes. The measures will ensure that international
creditors supply the next 31 billion euro [$40.6 billion] tranche of
bailout relief. This will allow the cash-strapped Greek government to
meet its debt obligations beyond the end of November.
But the clash between the two countries over the terms of Athens'
bailout has led to feisty rhetoric from senior members of both German
and Greek political parties.
Frank Schaeffler, a German member of parliament in the Free
Democratic Party, has previously advocated the sale of uninhabited Greek
islands to fund creditor repayments. He told CNN that "unfortunately"
the proper enforcement of a Greek adjustment program is an "illusion."
Schaeffler said: "I am afraid Germany has softened its stance on Greece
lately ... Samaras himself has said that Greece is willing to sell off
its uninhabited islands."
Former Greek Foreign Minister Stavros Dimas called the suggestion
"insulting," and said Germany should pay reparations for the damage and
loss of life the country inflicted on Europe during the Second World
War. He told fellow parliamentarians that Greece has never waived its
right to claim reparations, including for the loan that Germany forced
Greece to pay for its own occupation. He added: "No one can erase the
tragedies that our country suffered... They are engraved in our
collective memory."European leaders are meeting in Brussels this week to
discuss the region's debt crisis, and policymakers will consider
creating a separate budget for the 17-nation monetary union.
Joerg Kraemer, chief economist at Commerzbank Germany's second
largest bank told CNN: "If Greece does not comply with the reforms and
austerity, the troika (ECB, IMF and European Commission) should not
recommend releasing fresh money, in pure economic terms."
Germany is concerned that a Greek exit from the eurozone could lead
to a domino effect, whereby a number of indebted nations including
Ireland, Portugal and potentially Spain and Italy may be forced to
withdraw from the common currency, which could lead to a full break-up
of the monetary union.Samaras' government is negotiating with the
International Monetary Fund and the European Union over extending the
cuts for another two years into 2014 and beyond.
If achieved, Economides says this would represent a political victory
for the coalition government, as it was elected partly on the promise of
extending the timeframe to make the cuts.Kraemer added: "I don't think
Greece will be part of the eurozone in five or ten years but currently
the politicians in Germany and elsewhere do not want to pull the plug." |