Germans question their role as European paymasters (Feature)

By Helen Maguire May 4, 2010, 4:08 GMT

Berlin - The debt crisis in Greece is prompting Germany to rethink its role as the paymaster of Europe, ahead of a key state election in which Chancellor Angela Merkel's handling of Greece's debt crisis has become a key issue.

After weeks of opposition to a Greek rescue package, Merkel's government finally set legislation in motion on Monday to contribute 22.4 billion euros (29.7 billion dollars) to a multi-billion-euro credit line for Greece over three years.

Most Germans are unhappy about funding the lion's share of the 110-billion-euro rescue package, fuelled by a slurry of media reports depicting the Greeks as lazy, corrupt and undeserving of Germany's hard-earned money.

Merkel's long reluctance to back a Greek rescue deal has been interpreted as a sign of a new-found prioritization of national interests over European ones.

'I can't understand why the fire brigade has spent weeks scratching their heads rather than manning the pumps,' said former foreign minister Joschka Fischer. He has previously chided Merkel for turning from 'Ms Europe' into 'Frau Germania'.

Key elections in the cash-strapped state of North Rhine-Westphalia have made it difficult for Merkel to find the words to convince voters that it is in Germany's interest to prevent Greece from defaulting on its debt.

Recent surveys have indicated that 57 per cent of Germans oppose the rescue package, while 76 per cent think Greece would not be able to repay the loan, issued by a state-owned bank.

Populist German newspaper Bild has stoked German resentment, reporting on Greek taxi drivers who refuse to issue receipts, scams to pocket European subsidies and rich Greek pensioners loathe to give up their income.

At the same time, the paper has featured regular Germans worrying how budget cuts in Germany would affect their salaries, pensions and community services such as kindergartens.

Less emotive newspapers, such as the financial Boersen-Zeitung, have suggested that Germany should 'begin printing German marks again,' as a Greek bail-out spelled the end of the euro.

Merkel has continually stressed that she is acting in both German and European interest, repeatedly stating that the stability of the euro was an absolute priority.

'A stable European currency is an incredibly high commodity,' the chancellor said after her cabinet approved Germany's share of the rescue package.

This justified her insistence on stringent Greek reform measures, and the involvement of the International Monetary Fund in any rescue package - at the same time setting a clear signal to any other struggling eurozone member.

In Germany however, people are beginning to ask questions about a euro currency that appears to rely on German discipline to fund other countries' recklessness.

Germans have been the staunchest defenders of the European project, which initially gave the country a new identity and a way to pay penance for its mistakes of the past.

Giving up the German mark for the euro currency was the ultimate sacrifice, in return for German reunification in 1990. The decision was based on the promise of a stable euro, backed by strict criteria.

But as Germany faces record debt to claw its way back from its own economic crisis, many feel the time has come to stop paying for a European dream gone awry, in which member states seem happy to share costs but balk at political integration.

ARD state television news anchor, Tom Buhrow, said Germany would remain great friends with its European neighbours, but, 'We'll just not share the pin code of our ATM card with you.'

Merkel was praised within Germany as the new 'Iron Chancellor' as she initially stood up to calls for a Greek rescue package, after it became clear to what extent the country had flouted the euro rules.

But quietly, Merkel seemed to change her 'nein' into a 'ne' - the Greek word for 'yes' - as the eurozone states agreed to contribute billions of euros to a rescue package, and German voters felt betrayed.

Michael Braeuninger, of the Hamburg Institute of International Economics, said Merkel had taken a big risk by playing a tactical game.

'On the one hand you can't help (Greece) as it would set the wrong signals, but on the other hand you have to help to prevent a crisis,' the economist said. 'The problem is that people don't immediately understand these tactics.'

With state elections in North Rhine-Westphalia taking place on May =9, Merkel has little time left to explain why Germany has agreed to pump billions of euros into Greece over the next three years.

The election is crucial in Germany's largest state - which has more inhabitants than all of Greece. A defeat for Merkel's struggling Christian Democrats would cost the government coalition its majority in the upper house of parliament.

After finally setting the wheels of a Greek bailout package into motion, Merkel's government launched into a media offensive to explain their course of action to the German public.

'We are fighting a fire that started in Greece so that it doesn't spread to (the rest of) Europe and our currency, but at the same time we are fighting the cause of the fire,' said Foreign Minister Guido Westerwelle.

However, many Germans are asking why they have to pay for the fire brigade when their neighbour's house is burning.