Ash_Williams
13th April 2010, 02:04 PM
http://online.wsj.com/article/BT-CO-20100413-708488.html?mod=WSJ_World_MIDDLEHeadlinesEurope
BERLIN (Dow Jones)--Germans' unease about a possible bailout of Greece remains, with some calling for Greece's expulsion from the euro zone or even urging Europe's largest economy to leave the currency bloc.
The criticism comes as details emerge of the EUR30 billion rescue package for Greece finalized Sunday by the euro-zone finance ministers. The bailout would cost Germany EUR8.4 billion, or more than EUR100 per head, if Greece asks for help.
Frank Schaeffler, a lawmaker with the ruling Free Democrats and outspoken critic of Greece, told Dow Jones Newswires that any bailout would breach European treaties and also makes no sense economically.
"I advocate for Greece to leave the euro zone voluntarily because this is the only chance for Greece to actually return to competitiveness by devaluing its currency," Schaeffler said.
Boersen-Zeitung newspaper, one of Germany's leading financial newspapers, called the deal "the beginning of the end of the euro" and said Germany's central bank should start printing its old money, the Deutschmark.
The lobby group for Germany's taxpayers is also outraged, with the country already around EUR1.6 trillion in debt, or 73.1% of GDP.
A bailout would be "a clear breach of the Maastricht Treaty," said the head of the Federation of German Taxpayers, Karl Heinz Daeke. "I can't accept that German taxpayers should bleed for Greece's bad economic and fiscal policy. Joe Sixpack can't understand why the planned tax cuts in Germany have been reduced but for Greece there is all of a sudden EUR8.4 billion available."
Germany gave up its strong Deutschmark when it become the founding member of the euro zone, which now includes 16 countries. The move to the single currency has been controversial form the start and some of the critics at the time now see the opportunity to mount a legal challenge to the euro if the bailout package is activated.
Wilhelm Hankel, a professor for economics and an expert on currency issues, has been one of the most outspoken euro critics and even went to court over the planned single currency. He has said he would try again if Greece gets the help.
In a recent open letter to Chancellor Angela Merkel, Hankel wrote that she should move to restore individual European currencies. The euro hasn't protected the countries against international speculation, but instead has invited it, he said.
"The single currency will only be available as long as Germany pays for it," Hankel said. "Give the countries of Europe their currencies back; because without them there is no economic miracle as it has once been in Germany--neither in Greece nor in any other country that is in a similar situation."
Ekkehard Wenger, professor of economics at the University of Wuerzburg, has said Germany should consider leaving the euro zone before other weak countries damage it as well.
Schaeffler called the bailout plan "economically fatal" because the Greek problems "don't get solved but get postponed," pointing to Greece's refinancing needs of roughly EUR86 billion by 2012.
"The plan also contradicts the agreement by the heads of state and governments from the end of March which said any help mustn't have any subsidy elements, but an interest rate level of 5% [as agreed to Sunday] is in the end, of course, a subsidy," he said.
At present, it remains unclear whether the government would ask for lawmakers' approval for a Greek bailout as part of a supplementary budget or whether it would label it an extraordinary expenditure or just inform the budget committee.
Asked what he would do if the government contributed to a Greek bailout, Schaeffler said "I look into all options, including legal actions."
He added that the rescue package creates "false incentives because it creates a union of collective liability in Europe for budget deficits of single countries."
Criticizing Greece's high wage deals, generous pension levels and poor tax enforcement, Draeke called on the ailing Mediterranean nation to privatize state assets such as real estate and companies.
"It's unacceptable that Greece will receive aid under such circumstances, unless there will be tough conditions linked to it," he said. "I am not convinced that Greece will be able to pay the loan back. And what has now happened might trigger aid requests from other countries that might get into a similar situation, such as Spain and Portugal."
He also expressed fears that constitutionally required consolidation efforts in Germany could falter "because if the Maastricht Treaty gets breached, Germany's states might think they can also violate Germany's debt-cap rules."
At the height of the financial crisis, which has led to soaring budget deficits, German committed itself last year to a constitutional debt cap that requires the federal government to nearly balance its budget from 2016 and the states from 2010.
BERLIN (Dow Jones)--Germans' unease about a possible bailout of Greece remains, with some calling for Greece's expulsion from the euro zone or even urging Europe's largest economy to leave the currency bloc.
The criticism comes as details emerge of the EUR30 billion rescue package for Greece finalized Sunday by the euro-zone finance ministers. The bailout would cost Germany EUR8.4 billion, or more than EUR100 per head, if Greece asks for help.
Frank Schaeffler, a lawmaker with the ruling Free Democrats and outspoken critic of Greece, told Dow Jones Newswires that any bailout would breach European treaties and also makes no sense economically.
"I advocate for Greece to leave the euro zone voluntarily because this is the only chance for Greece to actually return to competitiveness by devaluing its currency," Schaeffler said.
Boersen-Zeitung newspaper, one of Germany's leading financial newspapers, called the deal "the beginning of the end of the euro" and said Germany's central bank should start printing its old money, the Deutschmark.
The lobby group for Germany's taxpayers is also outraged, with the country already around EUR1.6 trillion in debt, or 73.1% of GDP.
A bailout would be "a clear breach of the Maastricht Treaty," said the head of the Federation of German Taxpayers, Karl Heinz Daeke. "I can't accept that German taxpayers should bleed for Greece's bad economic and fiscal policy. Joe Sixpack can't understand why the planned tax cuts in Germany have been reduced but for Greece there is all of a sudden EUR8.4 billion available."
Germany gave up its strong Deutschmark when it become the founding member of the euro zone, which now includes 16 countries. The move to the single currency has been controversial form the start and some of the critics at the time now see the opportunity to mount a legal challenge to the euro if the bailout package is activated.
Wilhelm Hankel, a professor for economics and an expert on currency issues, has been one of the most outspoken euro critics and even went to court over the planned single currency. He has said he would try again if Greece gets the help.
In a recent open letter to Chancellor Angela Merkel, Hankel wrote that she should move to restore individual European currencies. The euro hasn't protected the countries against international speculation, but instead has invited it, he said.
"The single currency will only be available as long as Germany pays for it," Hankel said. "Give the countries of Europe their currencies back; because without them there is no economic miracle as it has once been in Germany--neither in Greece nor in any other country that is in a similar situation."
Ekkehard Wenger, professor of economics at the University of Wuerzburg, has said Germany should consider leaving the euro zone before other weak countries damage it as well.
Schaeffler called the bailout plan "economically fatal" because the Greek problems "don't get solved but get postponed," pointing to Greece's refinancing needs of roughly EUR86 billion by 2012.
"The plan also contradicts the agreement by the heads of state and governments from the end of March which said any help mustn't have any subsidy elements, but an interest rate level of 5% [as agreed to Sunday] is in the end, of course, a subsidy," he said.
At present, it remains unclear whether the government would ask for lawmakers' approval for a Greek bailout as part of a supplementary budget or whether it would label it an extraordinary expenditure or just inform the budget committee.
Asked what he would do if the government contributed to a Greek bailout, Schaeffler said "I look into all options, including legal actions."
He added that the rescue package creates "false incentives because it creates a union of collective liability in Europe for budget deficits of single countries."
Criticizing Greece's high wage deals, generous pension levels and poor tax enforcement, Draeke called on the ailing Mediterranean nation to privatize state assets such as real estate and companies.
"It's unacceptable that Greece will receive aid under such circumstances, unless there will be tough conditions linked to it," he said. "I am not convinced that Greece will be able to pay the loan back. And what has now happened might trigger aid requests from other countries that might get into a similar situation, such as Spain and Portugal."
He also expressed fears that constitutionally required consolidation efforts in Germany could falter "because if the Maastricht Treaty gets breached, Germany's states might think they can also violate Germany's debt-cap rules."
At the height of the financial crisis, which has led to soaring budget deficits, German committed itself last year to a constitutional debt cap that requires the federal government to nearly balance its budget from 2016 and the states from 2010.