Germany warns against knee-jerk reaction on Greece

23rd April 2010, Comments 0 comments

German Economy Minister Rainer Bruederle warned Friday that a knee-jerk reaction to the debt crisis in Greece would be wrong, adding that Athens has not yet reached the point where aid is required.

"We are watching the situation closely and we are taking it seriously. But we will not make a knee-jerk reaction. That would be exactly the wrong reaction," Bruederle said in parliament.

The members of the eurozone and the International Monetary Fund stand ready to come to Greece's aid "as a last resort," he said. "Until now, this situation has not happened."

Pressure on Greece has mounted following an downwards EU revision of its deficit on Thursday and a downgrade by Moody's, a debt agency.

Given the challenges facing Athens to raise money for looming debt payments, analysts believe the government has no choice but to call on the EU-IMF rescue package.

Bruederle's comments came as some politicians in Germany complained the bill to Berlin for a potential bailout of Greece could be too high.

Frank Schaeffler, the fiscal expert of the pro-business FDP party, the junior partner in Angela Merkel's governing coalition, said Germany might have to stump up as much as 30 billion euros (40 billion dollars) by 2012.

"Greece is a bottomless pit," the outspoken Schaeffler, who previously suggested Greece should sell some of its islands to raise cash, told mass circulation daily Bild.

© 2010 AFP

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