Could Greece's Debt Crisis Become Merkel's Worst Political Failure?

Could Greece's Debt Crisis Become Merkel's Worst Political Failure?

6:07pm Jul 10, 2015

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Transcript

DAVID GREENE, HOST:

It is probably overstating it to say the future of Greece is in the hands of one woman, but any deal to help Greece with its debt and bring its economy back from the brink does need approval from Angela Merkel. The German chancellor has a pivotal role at the EU emergency summit on Greece this weekend. But Merkel herself is politically in a difficult spot. At home, Germans are overwhelmingly against giving Greeks any more breaks. NPR's Soraya Sarhaddi Nelson reports from Berlin.

(SOUNDBITE OF SPEECH)

CHANCELLOR ANGELA MERKEL: (Speaking German).

SORAYA SARHADDI NELSON, BYLINE: Earlier this week in Brussels, Merkel spoke of European solidarity as being the only way to end the impasse with Athens. While that may sound as if the chancellor is looking to compromise, it's very difficult for her to do so. It will be highly unpopular back home if she budges on cutting Greece's mountain of debt, even though the IMF and Greek officials say that must happen for a deal to work. In fact, recent polls show most Germans don't even want Greece to stay in the currency union. Germany's largest newspaper, Bild, recently published a front-page doctored photo of the chancellor wearing a Prussian spiked helmet. The headline read, "No More Billions For Greece -- Today We Need The Iron Chancellor." Parliament member Wolfgang Bosbach is in Merkel's conservative Democratic Union party.

(SOUNDBITE OF INTERVIEW)

WOLFGANG BOSBACH: (Speaking German).

NELSON: In an interview this week with German broadcaster Deutsche Welle, Bosbach questioned whether Athens asking for another bailout is even legal at this stage. He predicts that even if a deal is struck in Brussels, Merkel will have a hard time selling it to her political party. People here in Germany are fed up with Athens, which they perceive as unwilling or unable to tackle rampant tax evasion, government corruption and a bloated pension system. A poll last week by broadcaster N24 found half of the Germans surveyed also disapprove of their government's handling of the Greek debt crisis.

DANIELA SCHWARZER: People expect her to keep a hard line on Greece.

NELSON: Daniela Schwarzer heads the German Marshall Fund's new Europe Program.

SCHWARZER: So there is a huge risk for her if there is a compromise that she takes this home and people think she hasn't been able to have it her way in Europe.

NELSON: Not that shepherding a Greek exit from the currency union, like most Germans want, is going to help Merkel either, Schwarzer says. That and a Greek loan default would mean Germany, as Athens's largest creditor, would lose the tens of billions it paid for the Greek bailout in recent years.

SCHWARZER: Then Merkel would have to come back home and explain to German taxpayers that this money is actually lost. And that would, of course, be a huge political hit for her.

NELSON: Marcel Fratzscher, who heads the German Institute of Economic Research, agrees. In a recent Financial Times op-ed, he predicted the long-term political damage could be devastating for the German government. He says people will want to know why the eurozone and Merkel, as its most important leader, failed to get their act together over the past five years to end the crisis. Soraya Sarhaddi Nelson, NPR News, Berlin. Transcript provided by NPR, Copyright NPR.

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