ATHENS – German Chancellor Angela Merkel’s office is denying a report that she recommended to Greek President Karolos Papoulias that Greece should hold a referendum on whether to stay in the Eurozone. Late last year, she blasted then Prime Minister George Papandreou for making a similar recommendation on whether Greek voters were in favor of a second bailout plan that came with more of the austerity measures that have plunged the country into a deep recession and sparked two years of protests, strikes and riots.
In a telephone call with Papoulias, Merkel “conveyed thoughts about a vote parallel to the election with the question to what extent do the Greek citizens wish to remain within the Eurozone,” said a statement from the office of Greece’s interim prime minister. Media reports said that Merkel had suggested Greece could hold a referendum on the euro when it votes in national elections next month, the second after a May 6 poll resulted in a stalemate in which no party won enough to rule. Greece is now being run by a caretaker government with virtually no powers before the June 17 elections.
But a spokeswoman in Berlin said, “The information reported that the chancellor had suggested a referendum to the Greek President Karolos Papoulias is wrong.” The Greek crisis has set off fears that a failure to form a government supporting more austerity measures could force the country out of the Eurozone of the 17 countries using the euro as a currency and jeopardize the bloc itself.
The alleged proposal ruffled feathers across Greece’s deeply fragmented political spectrum, with parties saying it was an unwarranted intervention in Greek affairs. Merkel’s comments were first referred to by Greek government spokesman Dimitris Tsiodras in a statement: “(Merkel) also conveyed to the President thoughts on holding a referendum along with the elections, with the question of to what extent Greek citizens wish to remain in the Eurozone,” the Associated Press reported. Tsiodras said a referendum was “obviously” out of the question, as it falls outside the jurisdiction of Greece’s newly-appointed caretaker government. A German government spokeswoman said reports on the alleged referendum proposal “are inaccurate.” She said the conversation between Merkel and Papoulias — a fluent German speaker — was confidential.
New Democracy leader Antonis Samaras, whose pro-bailout party won a Pyrrhic victory in the May 6 vote, said Merkel’s reported suggestion was “at the very least unfortunate.” He added, “Greece doesn’t need a referendum to prove its choice in favor of the euro, a choice that it’s defending with bloody sacrifices…But the Greek people deserve the respect of their European partners.”
Radical Left Coalition leader Alexis Tsipras — who led his anti-bailout party to a surprise second place in the last election — said Merkel was treating Greece “as a protectorate.” Relations between the two countries have been turbulent over the two and a half years of Greece’s acute financial crisis, which led to Athens being kept solvent by international rescue loans since May 2010. Germany is a staunch advocate of the hugely unpopular austerity measures Greece adopted to secure its international rescue loans. Such is the worry that the Eurozone and Greek crises is expected to dominate the G8 talks in the United States this weekend. The reports of the German-Greek contacts came as US and French leaders ended talks in Washington focusing on the economy.
In the first elections, Greek voters gave 68 percent of their vote to anti-austerity parties. The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) is putting up a first bailout of $132 billion and is set to begin disbursing a second series of $173 billion in rescue loans, demands more austerity and warned that the next government must adhere to reforms or the money pipeline would be shut off.
Meeting in Washington just before news broke of the reported German proposal, the US and French leaders said Greece should stay. “We have the same conviction that Greece must remain in the Eurozone,” France’s new President, Francois Hollande, said. He was also elected on an anti-austerity pledge. U.S. President Barack Obama said the situation in the Eurozone was of great importance to the people of Europe and the whole world.
Earlier, European Union Trade Commissioner Karel De Gucht said the European Central Bank and the European Commission are working on emergency scenarios in case Greece had to leave the single currency but set off a dispute with the EU’s Finance Commissioner, Olli Rehn, who said he is responsible for economic affairs and denied de Gucht’s report was accurate. “We are not working on the scenario of a Greek exit,” Rehn said.
(Sources: AP, BBC)