Germany Worries About Greek Costs

“Greece elects a euro monster!” exclaimed tabloid newspaper Bild. “How many billions is this going to cost us?”

And that pretty much sums up the mood here in Germany. The government in Berlin must wait to hear what kind of concessions the new Greek government might seek but already its position is clear.

“It is important for the new government to take action to foster Greece’s continued economic recovery,” said Angela Merkel’s spokesman. “That also means Greece sticking to its previous commitments.”

And, one by one, politicians from both sides of the governing coalition went on record to emphasise the same point: there’s not much more Germany can offer in the way of concessions to Greece.

“We have already restructured the debt,” one MP said to me. “We have very, very low interest rates. We have very long maturity.”

There is a sense of frustration here.

Just a few days ago the European Central Bank announced its programme of quantitative easing. A measure that Germany has fiercely opposed. The Bundesbank was unequivocal: structural reform is the answer.

Its president is still making the same argument. The answer for Greece, says Jens Weidmann, lies in reforming its finances, its economy. A debt “haircut” is not a long-term solution.

via BBC

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