Mixed German messages on Greece serve a purpose

Staff Writer
Columbus CEO

BERLIN (AP) — German government officials have appeared to send mixed messages about their desire for Greece to keep using the euro — and that's just the way they want it.

The approach has helped keep up the pressure on a Greek government viewed in Berlin with deep suspicion, while also keeping increasingly disgruntled conservative German lawmakers in line.

Wolfgang Schaeuble, Chancellor Angela Merkel's hawkish finance minister, has been in the spotlight since a leaked document from his ministry proposed the possibility of a voluntary, temporary Greek euro exit — suggesting in the strongest terms yet that Athens' European creditors were contemplating a Eurozone without Greece.

That helped turn up the heat on Athens ahead of Monday's agreement on a bailout plan full of tough conditions.

Even after that deal, Schaeuble continued talking about a potential "Grexit" ahead of a Greek Parliament vote Wednesday on new austerity measures and Friday's German Parliament vote to approve detailed bailout talks. On Thursday, he said that "it would perhaps be a better way for Greece, and many say that — increasingly in Greece too."

The tough talk appeared aimed in part at reassuring wavering lawmakers in Merkel's and Schaeuble's own conservative bloc that their leaders weren't about to go soft on Greece's radical left-led government.

The German Parliament has to vote on all-new rescue packages and major amendments to existing ones. Once a bailout is finalized — expected to take several weeks — Merkel will have to face lawmakers again, and she needs to keep in check distaste and resistance to the bailouts in her conservative bloc.

For now, the dissent was manageable in Parliament, where Merkel's coalition has a huge majority. Lawmakers voted 439-119, with 40 abstentions, to give the government a mandate for talks with Greece.

The "no" votes included 60 of the 311-strong conservative caucus — double the previous record set in February when Parliament approved a four-month extension to Greece's previous bailout, but not a dangerous level.

Merkel has sent more emollient signals than Schaeuble. She said Friday that simply leaving Greece to crash out of the euro could lead to "chaos and violence" — though she drew a clear distinction between that and the idea of a voluntary time-out, which she said could only be decided in agreement with Greece and all the other eurozone countries. Neither was interested in the idea, and "this way was not viable," she said.

"However great the political differences may be, we are dedicating ourselves to Greece being able to remain in the eurozone," she said.

Schaeuble didn't directly refer to a Greek euro exit in Friday's debate, but concluded his speech with a coded warning to Athens: if Greece does its part, he said, "we will put all our strength into making this last chance a success."

The message: play by the rules or you could still risk cutting off aid and leaving the euro.

His hard-line approach drew a withering attack from the opposition Left Party, which is allied to Greek Prime Minister Alexis Tsipras' Syriza party.

"We had a good reputation internationally, Mr. Schaeuble, and you have begun to destroy it," caucus leader Gregor Gysi said. "Wherever our citizens go, they will feel it. And that is a great shame."

Gysi also admonished Merkel, saying that she portrays herself as strong but that Schaeuble's actions show "you are weak, too weak."

Merkel's and Schaeuble's apparently divergent positions look more like a "good cop, bad cop" division of labor, however.

The two have different roles — his main job is to look after German taxpayers' money, while she must consider wider concerns, including expectations abroad that the eurozone resolve its problems and the political implications of a Greek departure from the euro.

The pair regularly rank among Germany's three most popular politicians. Balancing Germany's budget, and ensuring that financial rules are adhered to elsewhere, have been a major plank of their appeal.

Schaeuble, 72, a veteran lawmaker who helped negotiate German reunification, enjoys strong credibility and loyalty in his ranks. He also has strong credentials as a longtime advocate of European integration, saying Friday that he has a "warm heart" but a "cool head" is also necessary. Conservative lawmakers applauded at length when Merkel thanked Schaeuble for his role in negotiations.

However, Schaeuble's talk of a "Grexit" has been awkward for their junior coalition partners, the Social Democrats. Their leader, Vice Chancellor Sigmar Gabriel, has faced questions about how much he knew of Schaeuble's suggestion and pressure from within his own ranks to push back. At the same time, he appears keen to reassure center-left voters that he's looking after their tax money.

The Greek government deserves "help and support" now that it has decided to swing behind reforms, Gabriel said Friday. "We are partners in implementing the result of the negotiations, and not opponents."

"For us in Germany, that means that all debates about a Grexit must come to an end," he said.


David Rising contributed to this report.

Geir Moulson has covered German politics since 2001.