Former German finance minister Peer Steinbrueck, who is challenging German Chancellor Angela Merkel’s re-election bid this year, said her insistence on austerity measures for Greece in return for international aid is too harsh and that the country needs more time to implement reforms even if it costs more money.
Steinbrueck said Merkel is too demanding in her terms for countries which need bailouts and said that they can’t be squeezed so hard. Greece is in a sixth year of recession that has been worsened by pay cuts, tax hikes and slashed pensions and caused a record unemployment rate of 26.8 percent, highest in the European Union.
Speaking at the London School of Economics a day before his scheduled visit on Feb. 5 with Greek officials in Athens, he said allowing Greece more time would be costly, but worth it, the news agency Reuters reported.
“It will perhaps cost some money and in my eyes it’s obvious it will cost some money from Germany as well and you have to tell the people, you have to tell the electorate and that’s what I miss (under the current government),” said the candidate.
Steinbrueck, who served as finance minister in a conservative grand coalition under Merkel from 2005 to 2009, said more economic stimulus and more stringent supervision and regulation of banks was needed alongside consolidation in struggling Eurozone states.
“I think many of these countries and their governments are to a certain extent not very content with such a strategy (of) only consolidation, consolidation, consolidation because it brings these societies and economies down to austerity,” he said.
Although the Greek government sent in the riot police to break up a Metro strike last month, protesting farmers and striking seamen are ramping up more tension and social unrest and the country’s biggest labor union has called for a general strike on Feb. 20. Prime Minister Antonis Samaras’ uneasy coalition government is imposing another round of austerity, some $17.45 billion, to keep bailouts coming.
Steinbrueck will become chancellor if Germany’s center-left Social Democrat (SPD) party wins September’s federal election but he is lagging badly in polls and trying to defend why he took such large fees in speaking engagements. If elected, Steinbrueck said he wanted to combat increasing social inequality by raising both income tax for some people and capital gains, investing the extra money in education.
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