Apparently frustrated she spends a lot of her time defending why she’s so tough on Greece – insisting on harsh austerity measures in return for her country’s backing of international bailout loans – German Chancellor Angela Merkel said Greece should never have been allowed to join the Eurozone in the first place.
Merkel blamed former chancellor Gerhard Schroeder for agreeing that Greece should join the common currency bloc. It was later discovered that Greece falsified its economic statistics to gain membership but no one has ever been prosecuted for fraud.
Merkel said at an election campaign rally in the town of Rendsburg on Aug. 28 that the Social Democratic (SPD) government under Schroeder had contributed to creating the causes of the crisis that has been brewing over many years by consenting to Greece’s entry in 2001.
“Chancellor Schroeder accepted Greece in and weakened the Stability Pact and both decisions were fundamentally wrong, and one of the starting points for our current troubles,” Merkel told supporters at the rally in remarks seen as countering attacks by SPD chancellery challenger Peer Steinbrueck on her Eurozone crisis policy.
Steinbrueck, a long shot to unseat Merkel, blamed her government for misleading voters on the costs from another Greek bailout and said she could come clean on how much that saving Greece is going to cost German taxpayers.
German Finance Minister Wolfgang Schaeuble said earlier this month that Greece, which is surviving on $325 billion in two bailouts from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) would need a third rescue package, with some estimates putting it at 10-11 billion euros ($13-$14.4 billion.)
He ruled out any chance of Greece being allowed to impose losses on the lenders, a so-called haircut, to reduce its debt as it did in 2011 when a previous government stiffed investors with 74 percent cuts on what it owed them. Germany, the biggest contributor to the bailout loans, consented to the first debt write-down because it didn’t affect its position.
With less than one month to go until the Sept. 22 German parliamentary election, polls have indicated that Merkel’s ruling coalition enjoys enough support to win a Parliamentary majority.
The opinion poll by market research company Forsa showed support for Merkel’s Christian Democratic Union (CDU) and its Bavarian CSU sister party stood unchanged at 41 percent, while the SPD party held at 22 percent.