European Debt Crisis

German aid for Greece comes with price

Stephen Beard Apr 30, 2010
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European Debt Crisis

German aid for Greece comes with price

Stephen Beard Apr 30, 2010
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TEXT OF STORY

Tess Vigeland: Today the Prime Minister of Greece, George Papandreou, said the country’s very survival is at stake. Without billions of dollars in emergency loans, the government could go bust. Word from Berlin today is that the Germans are now prepared to help — at a price.

Marketplace’s Stephen Beard has that story from London.


Stephen Beard: Most Germans oppose bailing out Greece. That’s why Chancellor Merkel has dragged her feet. Her government faces a crucial election on May the 9th. She could lose control of the upper house of parliament. Nevertheless Merkel is going to upset her voters. She’ll have the rescue package approved by the end of next week.

Analyst Heinz Schulte says Merkl had no choice. There is now a real danger of the crisis spreading across the eurozone.

Heinz SCHULTE: I think the situation is so dramatic, particularly against the background now — if you look at Portugal and Spain — that something had to done. She couldn’t wait. And I’m sure she’s not comfortable with that position.

To limit the political damage at home, Merkel insisted on much tougher medicine for Greece — like higher taxes and cuts in public sector pay by up to 20 percent. But the recent austerity measures provoked violent protests and strikes in Athens. There’s serious doubt the Greek government will be able to administer even more pain.

In London, this is Stephen Beard for Marketplace.

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