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Juncker hits out at German euro grumbles

Published on 18/05/2010

The head of the group of euro finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, on Monday criticised bearish German comments about Europe's debt crisis.

Juncker had been asked by journalists when he arrived to chair a meeting of euro finance ministers if he thought German Chancellor Angela Merkel, who said on Sunday that a near trillion-dollar euro rescue package had only bought time, was being helpful with such a remark.

“In my opinion, certain people would do better to think before they speak,” Juncker replied, adding that, for the benefit of the markets, and of Europe’s ordinary citizens, “sometimes they would do better to keep their mouths shut.”

Merkel had said that the euro leaders had “done nothing more than to buy time” with their actions, following a plunge on Friday for stock markets and the euro, which deepened until it hit a four-year low on Monday.

However, as he was locked in talks with Germany finance minister Wolfgang Schaeuble and France’s Christine Lagarde, a member of his entourage insisted to AFP that Juncker was not referring to Merkel’s comments, but others made by bankers concerning Greece and other weaker euro partners.

“He was targeting (Josef) Ackermann, (Axel) Weber and (Juergen) Stark,” the source stressed, referring to the chairman of Deutsche Bank, the head of the German centrak bank and the European Central Bank’s chief economist respectively.

Stark, as it happened, had used practically the same exact phrase as Merkel, that the 750-billion-euro emergency fund “has only bought time, nothing more,” in a German newspaper interview.

Ackermann, meanwhile, had expressed doubts over Greece’s capacity to deliver the budget cuts promised in exchange for 110 billion euros (some 140 billion dollars) of aid from euro partners and the International Monetary Fund.

“Over time, I am doubtful whether Greece will really be in a position” to meet its repayment schedule, he said.

Weber — widely touted as the next head of the ECB — had distanced himself from the central bank’s decision to buy up eurozone debts as part of the support effort.

That broke a longstanding taboo at the ECB, and taken together, the comments from such senior German banking figures — not to mention Merkel herself — were taken by markets as a sign of simmering dissent at a time when the eurozone was trying to present a united front.