ECONOMY

German chancellor candidate Steinbrueck warns against Grexit

German Social Democratic chancellor candidate Peer Steinbrueck said he’s going to have to clean up the mess created in Europe by Angela Merkel’s “one-sided” solution to almost four years of crisis in the euro region.

Speaking in an interview in Berlin on Tuesday, Steinbrueck said the “therapy” of budget cutting prescribed by the chancellor against the debt crisis that began in Greece in late 2009 has prompted a European rift, with “a downward spiral above all in Southern Europe.”

On Monday he said “Germany must contribute much more strongly to the stabilization of Europe.”

Steinbrueck, whose SPD trails Merkel’s Christian Democratic bloc by 13-17 percentage points in polls, is attempting to turn Merkel’s handling of the crisis to his advantage at the September 22 ballot.

In the interview, Steinbrueck said that any Greek exit from the euro must be averted since it would carry “incalculable” risks as contagion rippled out to engulf Spain, Italy or France.

He spoke after the Finance Ministry under his successor, Wolfgang Schaeuble, dismissed a report in Der Spiegel magazine citing a Bundesbank document as saying that Europe may need to provide more aid for Greece as soon as this year.

Risks to the Greek aid program continue to be “extraordinarily high” and “considerable doubts” remain about Greece’s ability to implement reforms, the Bundesbank paper said, according to Der Spiegel.

“To let a country like Greece go isn’t like a chemistry experiment in a lab that can be at some point be regretted as a shame when it goes wrong,” Steinbrueck said.

[Bloomberg]