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“Now is not the time for pessimism” (interview)

17.01.2012 - Interview

Federal Foreign Minister Guido Westerwelle on the European debt crisis in an interview with the Neue Osnabrücker Zeitung. Published on 17 January 2012

Now that you have returned from Athens, Minister, what is your impression of the situation? Is Greek Prime Minister Lucas Papademos strong enough to save his country from bankruptcy through massive efforts towards austerity and reform?

I think Prime Minister Papademos is capable of courageously implementing the difficult programme of reforms that we have agreed upon together in Europe. However, all the political forces in Greece must support him in this.

You also met with opposition leader Antonis Samaras, who so far has been a conspicuous obstructionist...

In the talks with Antonis Samaras, I made it very clear that we expect the extensive reforms to be implemented without the interference of party politics. But I did not just say what we expect; I also wanted to be encouraging. It is a question of solving the problems together.

In Greece, the fear of what is to come has expressed itself as anger at the Germans, their perceived bossy tone, and their know-it-all attitude. What did you think of that?

When people complain publicly about Greece in Germany or about Germany in Greece, that is not an expression of a general consensus or overall mood. Most people can differentiate very clearly – in both countries. By pledging more that 22.4 billion euro, Germany made a very considerable contribution to the initial aid package for Greece. Fifteen billion euro have already been paid out. The Greeks have definitely taken notice of this and appreciate it. I would ask that people resist being swayed by prejudice and clichés.

What do you make of top manager Wolfgang Reitzle’s suggestion that Germany should leave the eurozone if its EU neighbours do not stick with budgetary discipline?

We are well on the way to a true stability union: budgetary discipline is of course part of that, as are sanctions when rules are broken. I strongly advocate resisting the centrifugal force exerted on Europe in the crisis. Europe is more than just the euro and the single market. It is a community bound together by a common destiny. In an era of globalization, we must stick together, also to assert ourselves in competition with increasingly strong centres of power such as China, India, or Brazil.

The head of Greece’s government has said that his country will be insolvent by March without aid from abroad. How great is the danger?

There is too much speculation. I am not going to join in. Chances are good that Europe will master the situation by working together. It is clear that you do not solve a debt crisis by making it easier to accumulate debt. So I continually repeat – also to the opposition parties in Germany: Eurobonds are not only the wrong instrument for true consolidation, but would also endanger the economic well-being of Germany and Europe because more and more debt and higher and higher taxes are not the answer.

Some banks and hedge funds are resisting a haircut for Greece and the waiving of claims to 100 billion euro in debt repayment. That is the prerequisite for a second, 130 billion-euro EU aid package for Athens. Is the rescue plan going to fail?

Let us wait and see how the negotiations progress. Everybody knows how precarious the situation is. We should not underestimate the psychological factor. Now is not the time for pessimism and public debates about catastrophe scenarios.

Did you bring up the topic of “returning to the drachma” in the talks with the head of Greece’s government, Papademos?

No. I strongly recommend that the euro should not be called into question at all. That certainly does not build confidence. It only scares citizens and investors.

What about ratings agencies? The creditworthiness of nine eurozone countries has been downgraded. Is that an Anglo-American attack on the euro?

I am not a conspiracy theorist, but even the agencies themselves admit that they also make political evaluations. I am a strong advocate for the creation of independent European ratings agencies. It is high time to do so. More competition would be good. In Germany we have had very good experiences with the independent German Consumer Foundation “STIFTUNG WARENTEST”. Nobody questions its impartiality, its judgement, or its separation from the state. It enjoys widespread credibility. Why not take the idea behind such a foundation as the model for an independent European ratings agency? I will hold talks with my European counterparts on this topic again.

Will Germany have to shoulder more of the burden of saving the euro, now that France has lost its top credit rating?

The burden will be shared as has been agreed in Europe. I also do not see any deterioration of the excellent relations with France. I am confident that President Nicolas Sarkozy will push forward with the planned reforms in France.

[…]

Reproduced with the kind permission of the Neue Osnabrücker Zeitung. Interview conducted by Beate Tenfelde.


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