GERMAN REACTION:GERMANY'S RULING Christian Democrats (CDU) have given a cautious welcome to the stress test results, calling them a "good opportunity to create transparency".
Michael Meister, finance spokesman for the CDU parliamentary party, said Germany took a relaxed view of a further capital injection and “does not view it as lost money”.
“Transparency is important because through transparency one achieves trust.
Anything that damages trust would be bad in this situation,” he said, adding that full disclosure now was the quickest way back to the capital markets and financial health.
Neither the chancellery nor the finance ministry were prepared to comment last night on the stress test results.
However, senior German government figures have indicated recently that they were less worried about further loans to Ireland and more concerned that Irish banks were not being fully candid about their true financial state.
Further revelations and false floors would damage trust and make assistance to Ireland more difficult to justify to voters, one senior official warned.
Already there are signs of tension over the euro zone rescue deal within Chancellor Angela Merkel’s CDU parliamentary party, according to well-placed sources.
The Free Democrat (FDP) junior coalition partner has an even blacker view of the bailout following a series of poor state election results.
One senior FDP leader criticised the euro zone rescue deal agreed in Brussels last week – involving further contributions by Germany to the bailout fund – as a “betrayal of the FDP’s basic principles”.
“Some MPs are using this topic to boost their own profile,” said Dominik Hierlemann, EU analyst of the Bertelsmann Foundation. He suggested that Ireland could count itself lucky that many Germans were distracted by regional elections, a debate over nuclear energy and the latest news from Japan.
“The new figures haven’t proven to be the straw that broke the camel’s back,” he said. “In an insecure situation, the stress tests have at least brought some clarity and security.”
A poll in yesterday's Die Zeitnewspaper found that 55 per cent of Germans trust the euro to have a long-term future as a currency – down from before the financial crisis in 2008, when the figure was 78 per cent.
Meanwhile some 31 per cent of those surveyed were of the view that the EU brought more disadvantages to Germany than advantages, the highest figure since 1994.
Just 24 per cent see benefits for Germany.