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Merkel bears no gifts on Greek visit

By Quentin Peel, FT.com
updated 9:14 PM EDT, Mon October 8, 2012
STORY HIGHLIGHTS
  • Merkel trip to Greece has everything to do with symbolism, rather than substance
  • Greek prime minister's party is a member of the same political "family" as Merkel
  • She will repeat her support for the structural reforms required of the Greek government

(Financial Times) -- More than any other European leader, Angela Merkel is unloved in Athens: she is seen as the main enforcer of drastic austerity measures imposed by the EU on Greece to resolve its debt crisis.

The German chancellor has been caricatured in extreme left and rightwing publications as a jack-booted Nazi. The fact that Germany has pledged billions in taxpayers' money in loans and financial guarantees to ease the Greek debt burden is largely ignored.

So what has inspired Ms Merkel, notoriously risk averse, to run the gauntlet of potentially violent demonstrations on an official visit to Athens on Tuesday?

The truth is that it has everything to do with symbolism, rather than substance -- and it has as much to do with German politics as with the plight of the government in Athens.

The chancellor is coming at the invitation of Antonis Samaras, Greek prime minister. His conservative New Democracy party is a member of the same political "family" as Ms Merkel's CDU in the European parliament. He wants her blessing.

He expects her to say she opposes any Greek exit from the euro -- although her coalition partners in the Bavaria-based Christian Social Union, and the liberal Free Democratic party, have been actively speculating about it.

She will repeat her support for the structural reforms required of the Greek government in its adjustment programme. She will also express sympathy for the suffering of ordinary Greek workers and pensioners -- a sign of a more emollient tone. But she will not promise more money. She is bearing no gifts.

The chancellor faces a dilemma that has constrained her room for manoeuvre ever since the eurozone crisis broke. She must devise a rescue plan for the debt-strapped eurozone states while reassuring her own supporters that she is not turning the EU into a "transfer union" financed by German taxpayers.

Germany's pro-European convictions run deep. They were on display last week at the celebrations to mark the day of national unity, when East and West Germany were reunited in 1990. In all the main speeches, the dominant theme was not so much about Germany as Europe: on the need for European unity as the counterpart, the guarantor of German unification.

That is the national narrative. Yet Germany's unification process was painful, too. There are negative subtexts. West Germans still resent the "solidarity surcharge" they are paying to the East. They see it as a form of "transfer union". They do not want to do the same in the eurozone.

Most Germans also believe the price of unification was to abandon the Deutschemark in favour of the euro. They were never quite persuaded it was worth it.

With less than 12 months before the next general election, political tensions in Germany are starting to rise. Ms Merkel's instinct is to occupy the middle ground, by being both the good European, and a strict budget disciplinarian. So far it has stood her in good stead. She is the country's most popular politician, and the CDU is the most popular party.

To her left, the chancellor faces an opposition of Social Democrats (SPD) and Greens who blame her for being too mean and too hesitant. Peer Steinbr├╝ck, finance minister in her first administration combining CDU and SPD, is running as candidate for chancellor. He is a fiscal disciplinarian, but he also espouses the partial introduction of jointly guaranteed eurozone bonds to ease the debt crisis.

Ms Merkel's trip to Athens may be seen as a move to appease the critics who see her as a reluctant European, whose hesitancy in setting up the rescue system for the eurozone has aggravated the crisis.

But to her right she faces another less organised but still potentially powerful constituency: the lobby that fears the eurozone is becoming nothing more than a transfer union. The danger for the chancellor is that many are her natural conservative supporters.

Ms Merkel believes that self-discipline is essential to restoring confidence in the financial markets. So her fundamental message in Athens will remain the same: put your own house in order first. Solidarity comes second.

© The Financial Times Limited 2015

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