Merkel eyes Greece deal as rival slams her crisis policy

21st November 2012, Comments 0 comments

German Chancellor Angela Merkel said Wednesday a deal to release funds for Greece could be clinched next week, as her election rival launched a blistering attack on her policies to stem the eurozone crisis.

In a wide-ranging speech on Germany's budget in the Bundestag lower house of parliament, Merkel said there was "a chance there will be a solution on Monday" for debt-wracked Greece after a Eurogroup meeting collapsed overnight.

But she reiterated there would not be "one action, one solution in one fell swoop, one truth" to overcome the three-year crisis that has brought the 17-nation eurozone to the brink of being torn apart.

"It is a process and what has been done over years and decades cannot be resolved overnight and therefore we will continue to proceed step by step," added the chancellor.

With less than a year until elections in Europe's top economy, her Social Democratic rival for chancellor, Peer Steinbrueck, a former finance minister, lashed out at her efforts to put out the eurozone's fires.

"Say it how it is," he said, to cheers from his supporters, urging her to admit that saving Greece would require German taxpayers to make greater sacrifices and incur more costs.

"Your dance of the seven veils (was) to the tune of 'not a cent for the Greeks' (in 2010)," he said, adding that it had now changed to "'there'll be no additional money for Athens'".

But he warned: "The moment of truth is here. There must finally be ... concrete relief for Greece's state debt."

"The finance gap cannot be closed. We have long been in a liability union. Tell this finally to the German taxpayers," Steinbrueck said in an animated address.

Merkel hit back, saying that the proposals for Greece's economy would set the embattled country back on the road to growth.

"If you read the 500 pages that we sent you on reforms in Greece, then you will know that it's not just about savings," she stressed.

"It is about savings -- especially in the public sector -- but it is also about a necessary and deep restructuring of the Greek state so that in the long run the Greek people can live again in prosperity and shape their own future," she added.

Eurozone finance ministers failed at an emergency meeting Wednesday to strike a deal to unblock bailout funds needed to keep Greece from bankruptcy and said they would try again on Monday.

A day earlier, they had expressed confidence that a deal would be reached to release 31.2 billion euros ($40 billion) in aid to Greece and resolve a rift with the IMF over how to get the debt-stricken state's economy back on track.

But the talks ended nearly 12 hours later, in the small hours of Wednesday morning, without the desired result.

"It is good news that the troika has said that the conditions for reform in Greece -- the so-called prior actions -- have been fulfilled. That is important progress and I know what efforts it cost the Greek government," she said.

Recession-battered Greece has been waiting since June for an instalment of 31.2 billion euros in aid, part of a 130-billion-euro financial assistance package initially granted early this year.

By the end of the year, Athens is also due to receive two more aid payments, worth 5.0 and 8.3 billion euros. In return, it has pledged to implement a series of unpopular austerity budget measures.

The troika of international creditors, comprising the EU, the European Central Bank and the International Monetary Fund, has offered a broadly positive assessment of Greece's reforms.

"Greece has delivered. Now it's up to us to deliver," said the head of the Eurogroup finance ministers Jean-Claude Juncker.

© 2012 AFP

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