Merkel says Europe will not be 'held hostage' by Greece

Sat, Jun 16, 2012, 01:00

German chancellor Angela Merkel today said it was important that Greece elects a government that will honour the terms of bailout agreements with international lenders.

"It is very important that - in the Greek election tomorrow -- the result is the formation of a government that will say, ok, we'll stick to the agreements," Dr Merkel said at a rally of her Christian Democratic Union in Darmstadt.

Honouring agreements is "the only basis on which Europe can thrive," she added.

Greece goes to the polls tomorrow in an election that may determine whether the country becomes the first member of the euro zone to leave the single currency.

A May 6th ballot that boosted parties opposed to austerity measures failed to yield a government.

The leader of the leftist Syriza party Alexis Tsipras, who promises to renege on Greece's end of the bailout deal, and New Democracy ran even in final opinion polls.

"It can't be that - and that's what's at stake at the Greek elections - that those who don't stick to the agreements hold everyone else hostage," Dr Merkel said

Greeks say they want to keep the euro, but they do not want the pension, wage and jobs cuts imposed by the bailout package and which have seen living standards plummet and unemployment reach almost 23 per cent.

"Tomorrow's vote must not be based on anger but on hope," the liberal left daily Ta Nea implored in an editorial. "It must be based on the Greece of the euro, not the Greece of the drachma."

Earlier, Eurogroup head Jean-Claude Juncker warned Greeks not to turn their backs on the euro. In a newspaper interview, he said a win by anti-bailout radical leftists in tomorrow’s election would have "unforeseeable" consequences for the euro zone.

"If the radical left wins - which cannot be ruled out - the consequences for the currency union are unforeseeable," Mr Juncker, head of the group of euro zone finance ministers, told Austrian paper Kurier.

"We will have to speak to any government. I can only warn everyone against leaving the currency union. The internal cohesion of the euro zone would be in danger."

In addition to the economic and social consequences for Greece itself, an exit would damage the entire currency union, he said, adding: "This has to be avoided. This would send a devastating signal. The Greeks must be aware of this."

No matter who wins the repeat vote, Mr Juncker said, European leaders would have to quickly address Greece's reform programme with the country's new leadership. "A third election would not be a solution."

He made clear, however, that renegotiating the substance of the conditions for international aid to Athens was out of the question.

Mr Juncker said he would spend tomorrow evening in telephone contact with European Central Bank president Mario Draghi and EU Economic and Monetary affairs commissioner Olli Rehn.

Agencies