German media blast Merkel's 'pricey' euro deal

25th March 2011, Comments 0 comments

German media on Friday lambasted Chancellor Angela Merkel's pledge to a giant new euro rescue fund at a Brussels summit, saying she had violated voters' trust with billions in new commitments.

"The old promise that 'we won't pay for the others' has been broken once again," the top-selling Bild newspaper wrote.

"A new permanent rescue fund has been agreed in Brussels and German taxpayers are contributing 22 billion euros ($31 billion) and a further 168 billion euros in guarantees. It's sad but true: when it comes to the euro, promises are always broken."

Business newspaper Handelsblatt asked in a front-page article whether Merkel could still be seen as a conservative after agreeing the "pricey" euro rescue package.

"Topping up the euro rescue fund will now cost cash for the first time -- 22 billion euros from the federal budget -- paid to the European Stability Mechanism," it said.

"There will be no money left for the promised tax cuts," which the government had said were possible from 2012.

It quoted the head of the economic council in Merkel's Christian Democratic Union, Kurt Lauk, as saying: "Europe is on the threshold of becoming a transfer union," with funds flowing from richer countries to poorer.

The conservative Frankfurter Allgemeine Zeitung raised the same fears.

"The history of the euro is a series of unkept promises. The European Union is becoming a transfer union, with Germany and France as the saviours."

The online service of Der Spiegel magazine said that by insisting on a rescheduling of German payments into the fund, Merkel had irritated allies.

"Because the Union and the FDP (coalition parties) wanted to lower taxes in the next election year rather than send money into a euro fund, the government suddenly wanted to pay its contribution from 2013 in five equal tranches," it said.

"Merkel duped her own finance minister in doing so and alienated her European colleagues but it didn't matter to her."

The current European Financial Stability Facility is to be replaced by a permanent European Stability Mechanism in 2013 but Merkel won a last-minute agreement to spread a 22-billion contribution over five years instead of three.

Meanwhile the left-leaning Tageszeitung blamed Berlin for Portuguese prime minister Jose Socrates's resignation late Wednesday.`

"The black-yellow government's one-sided insistence on savings and cuts instead of encouraging growth has now backfired," it wrote, referring to the party colours of Germany's centre-right coalition.

"Portugal's crisis is Merkel's crisis."

Only the conservative daily Die Welt came to Merkel's defence.

"(The opposition) knows that the euro aid package would have been much more disadvantageous for Germany without Angela Merkel's actions behind closed doors," it said.

© 2011 AFP

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