The Spanish EU Council Presidency has put Germany under pressure on the question of aid pledges for heavily indebted Greece. Spanish Foreign Minister Miguel Angel Moratinos said in Brussels that his country would push for an aid plan for Greece at the summit of heads of state and government later this week. Moratinos announced that Spain would do everything possible to send a signal of solidarity to Greece at the summit. So far, however, the federal government has refused concrete aid pledges.
Italy’s Foreign Minister Franco Frattini called for an end to the dispute before the EU summit. "We need a compromise – it is a difficult moment, we have an institutional and moral duty to intervene as soon as possible."
Barroso: No automatism
With the initiative, Spain and Italy are supporting EU Commission President Jose Manuel Barroso, who expects bilateral aid from Germany, among others, for the government in Athens. He is pushing for a decision at the EU summit and again countering Germany’s concerns. Even after a fundamental decision, the heads of government of the euro zone would not have to determine whether and in what amount they wanted to give the partner credit, Barroso told the "Handelsblatt". "The point is to create a support mechanism for Greece," he said. "That does not mean that this mechanism will also be activated. The participating member states of the euro zone will have to decide later if necessary."
Barroso admitted that Greece had not yet asked for financial support. Chancellor Angela Merkel and Finance Minister Wolfgang Schauble pointed this out again at the weekend. At the same time, however, Barroso stated that legal concerns about the EU Commission’s proposal to provide coordinated bilateral loans are unfounded. "The assistance mechanism we are proposing does not violate the ‘no bail-out’ clause or the national constitutions."
Coalition supports Merkel’s course
Federal Foreign Minister Guido Westerwelle supported Merkel and Schauble in the debate. He opposed any further aid decision to support Greece. Europe must show solidarity politically. "But it cannot be the case that Germany or the European Union put money in the shop window and thus the pressure to reform in Greece subsides," said Westerwelle in Brussels. With a view to the EU summit, Merkel once again explicitly stated yesterday: "Aid is not on the agenda on Thursday." She discussed the situation by telephone with the Greek Prime Minister Giorgios Papandreou. According to a government spokesman, Papandreou reiterated that his highly indebted country does not need any financial aid.
Greece: Don’t need any money until the end of April
The Ministry of Finance in Athens made this assessment more concrete and made it clear that the country would be able to do without fresh money until the end of April. "We have the opportunity to continue our course until then without having to go to the capital market," said Deputy Finance Minister Philippos Sachinidis to the broadcaster "Mega TV".
According to Petros Christodoulou, head of the finance agency responsible for debt management, Greece will have to take on around 16 billion euros in debt on the capital markets between April 19 and the end of May. According to Sachinidis, the Greek government has not yet made a decision as to when it will issue the next bond to meet the financial needs.
Allegations against Germany
Greece’s Deputy Prime Minister Theodoros Pangalos heated up the discussion about EU aid. The federal government is interested in a weak euro in order to boost exports, he said. If a decision is not taken soon about aid, the euro as a common currency is pointless. Pangalos also accused Germany of allowing its banks to speculate against Greece.