Merkel Ally Says Greece Still In Peril

While Greek Prime Minister Antonis Samaras is trumpeting that he has saved Greece from being forced out of the Eurozone and won’t impose any more austerity measures, a senior conservative ally of German Chancellor Angela Merkel said there’s still a risk it will.
Alexander Dobrindt, General Secretary of the Christian Social Union (CSU,) the Bavaria-based sister party of Merkel’s Christian Democrats (CDU,) has long argued that Greece would be better off outside the Eurozone but has little support for those views.
German conservatives’ criticism of Greece has eased since the conservative-led government of Samaras accelerated harsh pay cuts, tax hikes and slashed pensions on workers, the elderly and the poor to keep international loans coming.
“The greatest risk for the euro is still Greece… I still believe that Greece’s exit would be a possible long-term alternative, for Europe and for Greece itself,” Dobrindt told Die Welt am Sonntag newspaper, according to advance excerpts of the interview released on March 9. “We have created a situation that gives Greece a chance to return to stability and restore competitiveness. But I still hold that, if Greece is not able or willing to restore stability, then there must be a way outside the Eurozone,” he said.
Dobrindt urged the European Commission, the European Unon’s executive arm, to prepare the legal ground to allow for the legal bankruptcy of a Eurozone member state and its exit from the currency union. Dobrindt’s comments contrasted with those of the CSU Chairman and Bavarian state premier, Horst Seehofer, who expressed solidarity with Greece and said it was on the “right path” when Samaras visited Munich last December.
Seehofer’s conciliatory tone echoed that of Merkel who has kept insisting on austerity for Greece while backing continued aid, but has apparently decided that despite foot-dragging on reforms that it’s cheaper for the EU to keep Greece in the Eurozone. Germany is the biggest contributor of two bailout packages of $325 billion in loans to Greece.
Merkel also is eager to keep down social unrest in Greece and criticism in Germany ahead of her country’s federal election in September. Bavaria also holds a state election in the autumn which the CSU is tipped to win.
Dobrindt made headlines last summer when he suggested Greece should start paying half of its pensions and state salaries in drachmas – the national Greek currency before the euro – as part of a gradual exit from the Eurozone but got no support for the idea.