Germans and the Greek challenge

 
German Chancellor Angela Merkel with Greek PM Antonis Samaras in Berlin, 24 Aug 12 Mrs Merkel reiterated her commitment to keeping Greece in the eurozone

It is one of the consequences of the eurozone crisis that Greeks and Germans regard each other with suspicion.

There are many Germans who believe that helping Greece amounts to feeding money into a bottomless pit.

Many Greeks suspect that Berlin wants them out of the euro.

So any meeting between the Greek prime minister and the German chancellor draws attention. When they met today they were both formal with each other but were careful to smile a lot.

This was an early round in a drama which will play out during the autumn. Angela Merkel said again that the goal of the federal government is "that Greece is part of the eurozone and I want Greece to remain part of the eurozone".

She had some praise for the Greek leader. "I am deeply convinced," she said, "that the new Greek government, under the leadership of Prime Minister Samaras, is doing everything to solve the problems that Greece is facing".

She also spoke of a new beginning in the relationship between the two countries. The Greek leader, who has irritated the Germans in the past, would have been pleased with that statement.

But there was no commitment to give Greece new concessions or to guarantee that the country will get the next round of bailout money.

"What Greece can expect from Germany," the chancellor said, "is that we will not make premature judgements but will await reliable evidence, which for me means the troika report". The inspectors from the EU and the IMF will give their assessment of whether Greece is living up to its commitments in September. Only then will Angela Merkel decide whether Athens qualifies for further funding.

'Time is money'

Mr Samaras repeated a message he has been delivering to German papers all week. "We don't want more aid," he said, "but we need breathing space". He is thought to be looking for an extra two years to meet the savings targets. Yesterday the German finance minister said "more time would, in case of doubt, mean more money".

The Greek leader hit out at what he called the "toxic statements" that questioned whether Greece was about to leave the euro. Such speculation, he said, made privatisations impossible.

All of this is early skirmishing. The real questions will have to be addressed if the inspectors conclude that Greece is not just failing to meet its targets but cannot make the grade because of the collapse of the Greek economy.

There will be many in Germany who will conclude that "enough is enough". That is unlikely to be the view of the German chancellor. She said today that the euro "is more than just a currency, it's the idea of a united Europe". She went on to say that "a united Europe is irreversible".

The German leader, it seems, is preparing the ground to tell the German people that further sacrifices will have to be made to save the big idea, the grand project. It would be hard to let Greece go when she has declared a united Europe as "irreversible".

She is also risk-averse as a politician and would always fear the unknown of a Greek exit and the possibility of the markets then turning on Italy and Spain. So the expectation has to be of a "fudge", whereby a formula is found for Greece to muddle through.

The difficulty will come if Greece needs further funding. It would be very difficult to get the German parliament to agree to that, but watching Angela Merkel today it was hard to imagine her ever putting Greece in the situation of having to leave the euro and opening herself to the accusation that she had let down the European project.

 
Gavin Hewitt Article written by Gavin Hewitt Gavin Hewitt Europe editor

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