Merkel Seeks to Damp Greek ‘Emotions’ as Crisis Weighs on Euro
German Chancellor Angela Merkel said she aims to calm the turmoil over Greece’s budget crisis in talks with Prime Minister George Papandreou, signaling her concern that “emotions” may be spinning out of control.
Greece’s budget deficit, the European Union’s biggest, has triggered the euro’s longest losing streak against the dollar since November 2008 and forced EU leaders to plan for possible emergency aid. The crisis has spilled over to German-Greek relations, after Greek Deputy Prime Minister Theodoros Pangalos suggested Germany isn’t entitled to criticize Greece because of the Nazi-era occupation of his country during World War II.
Merkel, who is scheduled to host Papandreou for talks on March 5, wants “to stay in close contact with him so the emotions don’t run so high,” she said in off-the-cuff studio remarks in Berlin yesterday overheard by reporters. On camera, Merkel said in an interview on ARD television that “the euro is certainly facing the most difficult phase since its inception.”
The comments are further evidence of Merkel’s concern about the risk Greece poses to the single currency, to Germany and the EU as a whole easy payday loans. Merkel, who leads Europe’s biggest economy, warned as early as Jan. 13 that Greece “can put us under great, great pressures.”
German lawmakers say euro-area officials are crafting a plan to grant Greece about 25 billion euros ($34 billion) in aid should the need arise, possibly by using state-owned lenders such as Germany’s KfW Group to buy its debt.
Merkel said in the interview that decisions on aid “absolutely haven’t been taken” and the European Commission, the EU’s executive arm, is in charge of the bloc’s response.
“We can best help Greece right now by making it clear that Greece has to do its homework,” Merkel said on ARD. “The Commission is dealing with that.”
Greece “must do what’s important for the country but also what’s important for all us,” she said.
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