GERMAN CHANCELLOR Angela Merkel has warned that the euro zone crisis should not be considered a bailout free-for-all at German expense.
The German leader insisted she would not be rushed into backing a candidate to head the European Central Bank, nor would she show her hand prematurely on the situation in Greece.
On German aversion to the EU as a permanent “transfer union”, Dr Merkel said Germans were happy to support structural funds and other programmes but drew the line at the idea of permanent economic transfer – thus the EU treaties’ no-bailout clauses.
“People are concerned that treaty articles that were very clear – that every country is responsible for its own debts – is not being followed. But we are watching closely that this continues to be the case,” she told foreign correspondents in her Berlin office yesterday.
A year after the first aid to Athens, with rumours of another programme growing daily, Dr Merkel said Greece had made huge progress and that she had an open mind about the progress being made.
“We can only draw conclusions to do something, or if something needs to be done, based on the results when the results are there,” she said, a nod to the latest quarterly mission of EU and IMF officials currently in Greece.
Senior German officials insist in private that the picture in Greece isn’t as black as suggested in recent reports of a reform slowdown.
“There has been huge progress in the public sector, wages, pensions and healthcare, and in raising taxes,” said one senior Berlin official, requesting anonymity. “But there is still so much potential for improvement because, at the beginning, it was such a mess.”
Pressed on the European Central Bank succession, Dr Merkel said she would not comment on individual candidates to succeed Jean-Claude Trichet in October, but, she said, “the fact we haven’t yet decided is directed against no one”.
With no candidate of her own, following the sudden departure of Bundesbank president Axel Weber, German officials have carefully sent out mixed messages over Dr Merkel’s thinking.
“I am one of those people – I think I’m known for that by now – who try to decide close to the time, when a matter is pending, because that’s when one has the best overview of the situation,” said Dr Merkel. When asked if she supported the candidacy of Italy’s central banker Mario Draghi she said: “Don’t worry that I won’t decide.”
The German leader dismissed suggestions Berlin had isolated itself and irritated its western partners by abstaining from the recent UN Security Council resolution vote on Libya. She said Germany was playing an active role in its alliance obligations but could not be expected to agree to participate in every operation.
“For me it was always clear that in the moment where it was agreed the resolution from which Germany abstained was now also our resolution,” she said. “We are good alliance partners and we will do everything to support its implementation just like the UK, France, US or others.”