Despite Opposition, Germany Likely To Pass Bailout
RENEE MONTAGNE, host:
This is MORNING EDITION, from NPR News. I'm Renee Montagne.
European leaders say they will press ahead with a rescue plan for Greece, a plan that's deeply unpopular in the country it's designed to help. In Athens yesterday, three people died in riots protesting the austerity measures that are a condition of the bailout. The rescue is also facing opposition in some EU countries, and nowhere more so than in Germany, where parliament is expected to vote on the bailout as early as tomorrow.
From Berlin, NPR's Jim Zarroli reports.
JIM ZARROLI: As any student of German history knows, Alexanderplatz is the big square where a giant demonstration took place that would help lead to the collapse of the Berlin Wall more than two decades ago. Germany has come a long way since then, but to people like Thomas Moser(ph), not all the changes have been good.
Stopping in the middle of the square, Moser says he's unhappy about the decision to unite much of the continent under a single currency, and especially about the government's decision to bail out Greece.
Mr. THOMAS MOSER: First, it's Greek, now Spain is not very good, Portugal. So, who else is coming? We always pay for everything, I think, and that's not okay. It's not okay.
ZARROLI: Not far away, Susan Blyer-Vilps(ph) sits on the edge of a sun-drenched fountain, eating lunch. She says European leaders simply waited too long to address Greece's debt problems, and like a lot of Germans, she has doubts about the way the conversion to the euro was handled.
Ms. SUSAN BLYER-VILPS: It's a good idea in theory, but in practice, a lot of poor decisions made in the last 15 years.
ZARROLI: Many here believe German Chancellor Angela Merkel contributed to the crisis. They say with elections coming up, she dithered about the rescue plan for too long, which made the financial markets nervous and sent interest rates rising across much of the continent.
Tomorrow, the German parliament will vote on whether to approve the plan. Members of the opposition, like Social Democrat Joachim Poss, say they may not support the bailout unless Merkel agrees to a new fee on bank transactions.
Mr. JOACHIM POSS (Social Democrat Party, Germany): (Through translator) German taxpayers should not have to pick up the tab for the financial crisis.
ZARROLI: Critics like Poss also want the government to accept regulations on short-selling, and on some of the complex financial instruments they say have contributed to the crisis, like credit default swaps. There's also likely to be a lawsuit challenging the bailout in constitutional court. Whether that suit can succeed is unclear. Christian Dreger of the German Institute for Economic Research says Europe is having to deal with the debt crisis on the fly because nobody ever anticipated it could happen.
Dr. CHRISTIAN DREGER (German Institute for Economic Research): We have not a real strategy to deal with this situations. I mean, when the euro area was introduced, everybody believed that we would become a high-gross island in the world economy.
ZARROLI: It hasn't turned out that way, of course, and Germans are angry. Still, Dreger believes the bailout will go ahead. European leaders have no choice.
Dr. DREGER: You could ask why we should help Greece, and so on. It's only a very spoiled country. But from the perspective of the euro area, of course, European banks are also engaged in Greece - in particular, French banks, but also German banks.
ZARROLI: He says a default by Greece would lead to enormous write-offs for the banks, and many of them owe money to other financial institutions and to governments. The danger is that would spark a credit crisis that would quickly spread throughout the continent and beyond, even to the United States, at a time when the world is already struggling to pull out of the recession.
Jim Zarroli, NPR News, Berlin.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.