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Europeans Split Over Debt Crisis

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Europeans Split Over Debt Crisis


Europeans Split Over Debt Crisis

Europeans Split Over Debt Crisis

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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After another week of financial turmoil in Europe, there was little hope that the Eurozone debt crisis is any closer to being resolved. NPR's Eric Westervelt in Berlin and Sylvia Poggioli in Athens join host Scott Simon to discuss how northern and southern Europeans differ in their attitudes to the debt crisis in Europe.


This is WEEKEND EDITION from NPR News. I'm Scott Simon. After another week of financial turmoil in Europe, this is little hope that the eurozone debt crisis seems to be any closer to being resolved. U.S. Treasury Secretary Timothy Geithner met with finance ministers from 17 countries that use the euro, in Poland yesterday. And he told them their inaction was posing what he called a catastrophic risk to world markets.

The finance ministers did approve tougher budget rules to punish overspending countries. But still, it seems the entire meeting was more about discussions than actual proposals. Of course, the big issue is Greece, its debt and the prospect of default. We're joined now by NPR's Sylvia Poggioli in Athens. Sylvia, thanks for being with us.

SYLVIA POGGIOLI: Great to hear from you, Scott.

SIMON: And Eric Westervelt is in Berlin. Eric, thank you for being with us.

ERIC WESTERVELT: You're welcome, Scott.

SIMON: Sylvia, let's begin with you - quickly, if we can. What's it like in Athens now?

POGGIOLI: Well, I was last here two and a half months ago, when there were some very, very loud and violent demonstrations against the austerity measures the government had passed. The difference I see is that it's much quieter. There's much less traffic in Athens, and everybody tells me it's because of the rising price of gasoline. And lots of shops have closed; fewer people in the cafes. But it's still, you know, end of summer. It may be that people are away from Athens. But certainly, the traffic struck me.

SIMON: Eric, let's go to you in Berlin, because Secretary Geithner's presence at the meeting on Friday was the first time that a U.S. finance chief has joined a eurozone meeting. Obviously, an indication of U.S. concern, but it doesn't sound like much was advanced. What did happen?

WESTERVELT: That's right and, I mean, not much did happen. I mean, Secretary Geithner said he was there to listen. But afterward, several European ministers sounded a bit annoyed, Scott, saying that he sort of came there and lectured them in dramatic terms about the need for the eurozone to really get on top of the crisis, but they complained that he didn't seem to really listen to their concerns.

And really, there was no progress shown on these core, big issues that include, you know, whether Greece is in fact meeting its austerity cut obligations in order to keep getting bailout money. It was announced that that won't be decided, Scott, until next month. No progress, as well, was made on a big dispute with Finland, which is demanding collateral guarantees for its contribution to this second big Greek bailout. And as well, the finance ministers ruled out taking steps to try to spur more growth in the region through stimulus measures.

SIMON: Sylvia, the prospect of defaulting, the talk about quitting the euro, how is all of that being felt in Greece?

POGGIOLI: At the official level, these topics are taboo. Behind the scenes, though, some experts are beginning to discuss them. There's deep concern among people who still have some savings in the banks; an exit from the eurozone terrifies them because they fear a big loss in value. The crisis has forced all Greeks to suddenly become financial experts.

There's growing resistance to the belt-tightening. Greeks say the draconian cure didn't work. All forecasts are off, and there's a total lack of trust in the political and financial establishments - both at home and in the rest of Europe. So it's not unusual that you hear nostalgia for the old drachma, the days when Greece could easily overcome a crisis by devaluing its currency and stimulate its exports.

SIMON: Eric, help us understand something, because there are, of course, a few European economies that are notably in trouble. Portugal and Ireland took bailouts. Italy and Spain are having major problems. Why is it, especially in Germany, that Greece is being pointed to so much?

WESTERVELT: Well, I think part of the reason, Scott, is there's a sense that this second Greek bailout won't be enough to end the bigger crisis overall. Remember, it was discovered, essentially, that the previous Greek government was sort of cooking its books, and essentially hiding the extent of its public debt. So that has prompted deep anger. And you know, Sylvia mentioned a lack of trust, but there's also a lack of trust from this end with the International Monetary Fund, German politicians, the European Central Bank. They've raised some serious questions about whether Greece is implementing cost-cutting austerity measures fast enough, effectively enough, and making much-needed structural reforms on how the country does business.

SIMON: Sylvia, how do the Greeks see it?

POGGIOLI: What's striking is the return of the old stereotypes. German condescension towards Greeks has reawakened old resentments and memories of the German Nazi occupation during the war. Just today, a newspaper front-page headline had the word Gestapo to describe the Athen's office of the chief of an EU commission task force who is a German national. It's a long way from the Europe of solidarity, and the dreams of greater integration.

SIMON: Let me get you to talk about this, finally, from the special vantage posts you have both in Berlin and Athens. What are people saying about the future, Eric?

WESTERVELT: Well, Scott, I think there's a sense of gloom here. People are complaining that European leaders keep throwing money at Greece - but in many ways, you know, coming up with half measures that are really avoiding the big issue, which many people think is fiscal integration. But creating any kind of economic, you know, United States of Europe is a long way off, but the markets want action now.

SIMON: Sylvia, how are a lot of Greeks looking at the future?

POGGIOLI: Well, there's great pessimism and depression here. As elsewhere in southern Europe, you'll hear many people say there is no future, especially for the young. The jobless rate for those under 30 across Southern Europe is devastating. It's 40 percent here in Greece, 43 percent in Italy, and 45 percent in Spain. Those who can't emigrate - like their grandparents in the '60s - those who can't are muddling along.

Many Greeks I've talked to say it's a political - not an economic - crisis. And they agree with Mario Draghi, who'll be the next European Central Bank president, when he said that Europe urgently needs to make a quantum leap in economic and political integration.

SIMON: NPR's Eric Westervelt in Berlin, Sylvia Poggioli in Athens. Thank you both very much.

WESTERVELT: Thank you, Scott.

POGGIOLI: You're welcome.

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