Saving its Own Skin, Germany OK's Greek IMF Move

Friday, March 19, 2010

Greek tragedy, next part: Germany has reversed its position and said it is comfortable if Greece turns to the International Monetary Fund (IMF) for assistance to avoid the country's bankruptcy. The 180-degree turn is understandable as direct German loans could set a precedent for the PIIGS who will need help going into the Trillions of Euros. Germany cannot save the whole Eurozone and Chancellor Angela Merkel is in the mid of parliamentary discussion about Germany's record budget deficit of €80 billion. has a good round up:

Germany has performed a dramatic u-turn and now says it would support International Monetary Fund aid for Greece, were it requested
"We see no need for immediate action now. Greece has not asked for aid," a German source working closely on the subject told EUobserver on Thursday (18 March). "In case the situation of Greece does get worse, Germany would be open for an IMF solution," the person added...
Reports suggest a ferocious internal debate has been raging within Angela Merkel's government over the legality of providing bilateral aid to another euro area state, with the decision apparently made this week that such a move would violate the German constitution...
The first suggestion Germany was changing its position came on Wednesday from Michael Meister, deputy leader of Angela Merkel's Christian Democratic Union party.
"We have to think about who has the instruments to push for Greece to restore its capital market access [if that were ultimately needed]," he reportedly told parliament. "Nobody apart from the IMF has these instruments."
Finland has also indicated it would support an IMF solution, with Italy and the Netherlands also thought to be in favour. Together, EU member states are one of the main contributors to the IMF.


Wikinvest Wire