German Chancellor Angela Merkel said yesterday that Ã¢â‚¬Å“Germany wants to helpÃ¢â‚¬Â, but Greece must meet a strict set of conditions before Germany will contribute to an aid package estimated to be worth up to Ã¢â€šÂ¬45 billion (US$60 billion). GermanyÃ¢â‚¬â„¢s cryptic messages continue to confound matters, and the resulting confusion over the status of the bail-out package, pushed the yield on 10-year Greek bonds to 9.4 percent. This is the highest return Greece has been forced to offer on 10-year bonds since the Eurozone became official in 1999.
Market watchers note that a key regional election is scheduled in Germany later in May. Some have suggested that MerkelÃ¢â‚¬â„¢s continued reticence is a sop to German voters where monetary support for Greece remains a hard sell after Germany was forced to adopt its own Ã¢â‚¬Å“austerityÃ¢â‚¬Â program during the height of the recession. To help make the expenditure of Ã¢â€šÂ¬8.3 billion (US$11.1 billion) Ã¢â‚¬â€œ GermanyÃ¢â‚¬â„¢s estimated share of the rescue plan Ã¢â‚¬â€œ more palatable, GermanyÃ¢â‚¬â„¢s Finance Minister, Wolfgang SchÃƒÂ¤uble, has been positioning the expenditure as a necessary evil to protect the value of the Euro itself.
Merkel described as Ã¢â‚¬Å“hard measuresÃ¢â‚¬Â the type of spending reform she insists is necessary for Germany to participate.
Ã¢â‚¬Å“When Greece accepts these tough measures, not for one year, but severalÃ¢â‚¬Â, noted Merkel, Ã¢â‚¬Å“then we have a chance for a stable euro.Ã¢â‚¬Â
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