Germany rules out debt cut for Greece as AfD revives Grexit demand

German reaction to Syriza’s election victory in Greece ranges from negative to jubilant

Germany’s  minister for finance, Wolfgang Schäuble: “Nobody is forcing anything on Greece. Our attitude to debt. . . remains unchanged.”

Germany’s minister for finance, Wolfgang Schäuble: “Nobody is forcing anything on Greece. Our attitude to debt. . . remains unchanged.”

 

German finance minister Wolfgang Schäuble has ruled out a further debt cut for Greece, but said a further extension of existing European Union-International Monetary Fund loans was a possibility.

Germany’s Christian Democratic Union (CDU) insisted yesterday the Syriza election victory had changed “nothing” in German – and European – attitudes towards the Greek reform programme. However, pressure is mounting on the government from Germany’s political left and a new eurosceptic fringe party.

“Nobody is forcing anything on Greece,” said Dr Schäuble. “Our attitude to debt . . . remains unchanged.”

News of Syriza’s win prompted the eurosceptic Alternative für Deutschland (AfD) to step up its demand for radical change in dealing with Greece.

Expel Athens

Bernd Lucke

Once outside, he said, a new devalued drachma would boost competitiveness and demand for Greek products, generating enough tax revenue to repay remaining EU loans.

“It is to our detriment if Greece stays in the euro,” said Dr Lucke. “But I fear politicians will give new loans and increase further the debt mountain rather than realise they cannot continue in this way; that Greece is broke.”

Reaction in Germany to Syriza’s election victory ranged from negative to jubilant.

Steffen Seibert, a spokesman for Chancellor Angel Merkel, said Greek “obligations aren’t erased by election day”, restating that EU “solidarity” depended on Greek “reform readiness”.

Mr Seibert denied a Berlin-Athens showdown was looming on euro rescue measures, saying such efforts were comprised not of German but of European measures agreed by euro members.

“What has to be clarified [now] is not through Greece and Germany at bilateral level but with Greece and its European partners,” said Mr Seibert.

With a nervous eye on hardline AfD demands for a “Grexit”, senior figures in Dr Merkel’s CDU took a robust stance, insisting they would “not honour breach of contract” from Syriza. Wolfgang Bosbach, head of the Bundestag’s interior committee, said leniency to Greece would send the “wrong signal” to other struggling euro countries.

Germany’s centre-left Social Democratic Party (SPD) was marginally milder in its take on the election result. SPD leader Sigmar Gabriel, the federal economics minister, said Athens had no alternative if EU and German assistance was to continue: “The efforts in Greece to reduce debts and rebuild the country must continue.”

Catastrophic

consequences

Germany’s union federation argued that austerity was the real catastrophe, “leading to scandalous living conditions in Greece and other countries”.

ECB board member Benoit Coeuré warned Athens via the Handelsblatt business daily not to expect leniency from Frankfurt.“It is not up to the ECB to decide whether Greece needs debt relief” since that was a political decision. “But it’s absolutely clear that we cannot agree to a debt relief that includes Greek bonds that are located at the ECB . . . that’s impossible for legal reasons.”

The most conciliatory reaction came from Germany’s opposition benches. The Greens warned that continued austerity would “tighten the noose” in Greece, while the Left Party, Syriza’s sister party, expressed optimism that a “red spring” was dawning in Europe.

The German media offered a differentiated reaction to the election result. The Bild tabloid, infamous for demanding “broke Greeks sell a few islands”, dubbed Mr Tsipras a “Euro bogeyman”.

The “Welt” daily suggested “Mr Tsipras, a gifted populist, will have to force uncomfortable truths on many Greeks who still deny reality”.