The aid package for Greece from the European Union and the International Monetary Fund (IMF) will amount to €135 billion ($179 billion) over the next three years, according to an announcement made Wednesday by German Economy Minister Rainer Brüderle. Under the current arrangement, Germany is supposed to annually contribute €8.4 billion to the package. But, according to Brüderle, the figure could go much higher. "I can't exclude the possibility that the amount will be higher," he told reporters while on a trip in Sao Paulo, Brazil.
Germany's opposition had already stated that Greece would need up to €120 billion over three years. This was the figure that Thomas Oppermann, a senior official in the parliamentary faction of the center-left Social Democratic Party (SPD), and Jürgen Trittin, the head of the parliamentary faction for the Green Party, had named after meeting earlier Wednesday in Berlin with European Central Bank (ECB) President Jean-Claude Trichet and International Monetary Fund chief Dominique Strauss-Kahn.
Trittin added that the €45 billion in loans for 2010 was just the beginning and that, in the end, everything depended on a consolidation requirement in the order of between €100 billion and €120 billion. For his part, Oppermann stated that this meant that the €8.4 billion that Germany was expected to have to contribute this year will actually be up to €25 billion, calling the situation "dramatic, but not uncontrollable."
Merkel Rebukes Charges of Hesitating
Trittin also took the occasion to blast Chancellor Angela Merkel. "The indecisiveness and dithering of the European Union, instigated by the chancellor, have exacerbated the crisis and driven the consolidation requirement into the heavens." As he sees it, it's time for immediate action. Oppermann also cited IMF estimates, communicated to him by IMF chief Strauss-Kahn, that suggest that the EU has waited far too long to manage the crisis.
Chancellor Merkel vehemently denied the opposition's accusations of hesitancy. Her deputy spokeswoman, Sabine Heimbach, told reporters Wednesday that: "From the very beginning, the chancellor has marked out a clear course of action together with her colleagues in the Eurogroup," referring to the body made up of the finance minister of countries belonging to the euro zone, and that Merkel's behavior had been "absolutely clear and in line with her course of action." And in an obvious reference to the repeated criticism from abroad about Germany's role, Heimbach added that the chancellor had "always given solid assurances" that she would help Greece given certain preconditions.
In terms of domestic politics, the question is now when the Bundestag, the lower house of the German parliament, will be able to approve the aid package for Greece and whether the opposition will allow an accelerated process. Oppermann said he could not imagine that "the Bundestag will agree without drastic measures on the currency and financial markets." He assumes that other parliamentary groups will not agree to a "blank check" that could encourage other countries to follow Greece's example.
The ECB and the IMF, on the other hand, are urging the Bundestag to approve the aid quickly. Strauss-Kahn said on Wednesday that trust in the euro zone is at stake, and that every day of hesitation only makes the situation worse. Trichet added that a speedy decision by the Bundestag is urgently required.
Merkel Waits on IMF Negotiations
The IMF and ECB are also putting Greece under massive pressure to pass a three-year savings plan as quickly as possible in order to stave off bankruptcy. It is extremely important that the talks in Athens are concluded within the next few days, Trichet said, adding that he was certain things would end well. He also stated that a rapid decision on the international aid package for Greece was absolutely urgent, given the fact that the country has until May 19 to secure €8.5 billion it owes to investors and thereby avoid insolvency.
Chancellor Merkel wants to await the results of the direct negotiations between the IMF and Athens on its savings plan before making any more decisions about the financial crisis. "At the moment, we now have a phase in which the International Monetary Fund and the European Commission have to work out a program with Greece," she said. "I hope that this will happen by the end of the week. Everything else depends on that."
Merkel's cabinet will draw up legislation on the German aid package for Greece on Monday at the earliest. The spokeswoman for the Finance Ministry, Jeanette Schwamberger, said that the draft legislation would be discussed on Monday in the cabinet so that the consultations with the Bundesrat, Germany's upper house of parliament, could be concluded by May 7.