Berlin and Athens agree: No bailout for Greece | Europe| News and current affairs from around the continent | DW | 05.03.2010
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Berlin and Athens agree: No bailout for Greece

German and Greek leaders were already united on one point before the Greek premier met with Chancellor Angela Merkel in Berlin: Athens said it didn't want handouts, and Berlin said it wasn't giving any.

German Chancellor Angela Merkel and Greek Prime Minister George Papandreou

Papandreou said he isn't looking for money and Merkel would rather give political support

German Chancellor Angela Merkel said after meeting Friday with Greek Prime Minister George Papandreou that Germany was more than willing to lend Greece its expertise - but not its money. And Papandreou said he was not looking for any.

During a press conference Friday evening, she announced the creation of a special commission of German experts that would help Greece improve and modernize its economy.

Merkel also told reporters that the European Union and G20 must work harder to prevent speculators from profiting from Greece's economic woes.

But Papandreou made it clear that one "solution" proposed by some Merkel allies on Thursday was absolutely off the table.

"I think that more creative solutions exist to tackle the deficit than selling Greek Islands," Papandreou said.

He was responding to suggestions from members of parliament from Merkel's conservative Christian Democratic Union, and its coalition partner, the pro-business Free Democrats. Greece has some 6,000 islands, only 227 of which are inhabited.

Debt plan approved --but not by all

Late on Friday, the Greek parliament approved the Papandreou government's new austerity plan, which includes 4.8 billion euros ($6.5 million) in wage cuts, a pension freeze, and tax increases. The scheme aims to get Athens' debt mountain under control without strangling economic growth.

That news was met with approval on the European stock markets and praised by Eurozone financial head Jean-Claude Juncker. But not so among the more than 12,000 estimated protesters who took to the streets in Athens.

A union leader was attacked by masked youths during a rally, and police fired tear gas to disperse the crowds. Some protesters broke store windows in the city center, and striking interior ministry employees occupied a state press to prevent the new budget from being printed.

Wanted: better borrowing terms

German Economy Minister Rainer Bruederle

Athens 'won't get a cent,' Bruederle says

Ahead of the Merkel-Papandreou meeting, German Economics Minister Rainer Bruederle said that the Greek government would have to "consistently adhere" to its new austerity plan.

"Every EU member nation has to get its house in order by itself," Bruederle said.

But Papandreou told the Friday edition of the Frankfurter Allgemeine Zeitung newspaper that his aim in coming to Berlin was to seek support in securing better borrowing terms from his European partners. Greece needs to be able to borrow money at "reasonable conditions," he said.

He pointed out that, currently, Athens pays 750 million euros more on a 5 billion euro loan than Germany does.

"No EU country can survive that," Papandreou told the paper.

And he warned that, without political support for the better borrowing terms, the crisis in the Greek economy "could prove very expensive for all of Europe."

Protesters wave union flags and chant slogans during a demonstration outside the Greek parliament in Athens

In Athens, workers have protested the austerity plan

Fighting against speculation

Speaking to the FAZ, Papandreou also called for a unified fight against speculation.

"While we are cutting salaries and extra pay for people in this country, speculators are earning millions by playing with the Greek economy," he said. "It is something we need to examine both on the international and European level: We can't let the market play with our fate."

Editor: Susan Houlton

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