ECONOMY

From German veteran, a plea for understanding for Greece

from-german-veteran-a-plea-for-understanding-for-greece

Amid rising anger in Germany at Greece, a former German central banker showed some understanding on Thursday for the near- bankrupt country, saying Europe’s monetary union was held together by values far more important than debt.

Ernst Welteke, president of the Bundesbank from 1999-2004, said that while the election of the SYRIZA party in January derailed Greece’s nascent economic recovery, the current crisis was not entirely SYRIZA’s fault.

"It’s not fair to blame everything on the current Greek government. There were a lot of problems before SYRIZA," Welteke told Reuters in a telephone interview.

The Greek parliament on Wednesday approved a package of measures required to open negotiations on a third multi-billion-euro aid programme. Now Greece should be cut some more slack, Welteke said "We should allow Greece to put in place growth policies that will take more time. They need to do the right reforms, and that takes much more time," he said.

Welteke, who was Bundesbank president when euro notes and coins were officially launched on 1 January, 2001, said the eurozone was more than merely a monetary union.

"It’s not a union of money, surpluses and profits. It’s a union of shared European values like humanity, freedom, peace, social responsibility, equal rights and press freedom," he said.

In this light, he dismissed the idea that Greece – or Germany, as some have suggested – will ever leave the eurozone.

He said some of the protagonists most involved in the Greek crisis, such as German Finance Minister Wolfgang Schaeuble and former Greek finance minister Yanis Varoufakis, had aggravated the situation.

As talks dragged on into Sunday, Schaeuble suggested that Greece take a temporary "time out" from the euro to get its finances in order.

"I don’t know why he came up with that proposal at the last minute. It put a lot of pressure on the Greek government," Welteke said.

The former central banker also defended the role of the European Central Bank throughout the eurozone debt crisis.

"So far, the ECB has done everything to stabilize markets.

We haven’t seen any market turmoil since Draghi’s ‘whatever it takes’ speech," he said, referring to ECB President Mario Draghi’s pledge in July 2012 to take all necessary measures within its mandate to preserve the euro.

[Reuters]