German chancellor hopeful Peer Steinbrück has criticised Angela Merkel for not levelling with voters about the inevitable bill they will face for the euro crisis.
Last week finance minister Wolfgang Schäuble said Greece will require a third assistance programme, bringing the euro crisis crashing into an otherwise sedate federal election campaign.
“I always said early on that Germany will have to pay for European stability and that of the euro zone,” said Mr Mr Steinbrück, the 66 year-old Social Democrat (SPD) challenger, in a TV interview.
But the admission from Mr Steinbrück, a straight-talking former finance minister in Dr Merkel’s first coalition, exposes the dilemma at the heart of his struggling campaign.
For the last four years from the opposition Bundestag benches, the Social Democrats (SPD) have criticised Chancellor Merkel in the euro crisis for giving too little, too late in the euro crisis.
That Greece requires a third aid package proves the Merkel “crisis strategy up until now hasn’t lit a spark, but rather has failed”, said Mr Steinbrück said at the weekend
However, he struggles to explain why, if the strategy was so wrong, the SPD backed the government in every Bundestag bailout vote and why it supports the key Merkel concept of conditional crisis assistance in exchange for tough reforms.
Flexibility on austerity
On the campaign trail Mr Steinbrück is calling for adjustments to the overall plan, proposing greater flexibility of austerity measures and a "Marshall Plan" of investment and stimulus measures for southern Europe.
He also supports the idea of so-called euro bonds – pooled sovereign debt – because he says Germany is effectively bound up in a so-called “liability union” with its neighbours.
“Merkel should have explained that to our citizens back in 2010, when she instead said that the Greeks won’t get a cent,” he told ARD public television.
But, with a 15-point gap to close with the ruling Christian Democrats (CDU), SPD campaign strategists admit that, at election time, honesty is not always the best policy.
German voters appear willing to shoot the bearer of bad news – Mr Steinbrück – for conceding that crisis guarantees to Greece may eventually come with a price tag for the taxpayer.
“The tragedy for us is that we supported Merkel in the Budestag to live up to our European responsibility,” said one senior SPD election strategist. “But we have gone further than Merkel has ever done by explaining the consequences of the euro crisis strategy and the potential cost. And voters are punishing us for this rather than Merkel.”
Issue on the agenda
Mr Steinbrück suggested that, with his Greece remarks last week, Dr Schäuble had "subconsciously put an issue on the agenda that Merkel would rather have left out of the election campaign".
But senior CDU officials disputed this yesterday, saying it had been a pre-agreed strategy to close down growing discussion of a second wave of debt relief for Greece.
“It was not a solo run by the finance minister but a necessary step to raise these questions,” said Hermann Gröhe, general secretary of the CDU.
Mr Schäuble said at the weekend he made his remarks because he “wanted to avoid anyone saying this government isn’t saying what it knows before the election”.
Chancellor Merkel came out yesterday to “warn vigorously” against loose talk over Greece’s finances, saying she “didn’t foresee” further debt forgiveness .
"It could trigger a domino effect of uncertainty with the result that the readiness of private investors to invest in the euro zone again fall to nothing," she told Focus magazine.
Third aid package
The German leader has declined to put a figure on a third aid package for Greece, saying the issue will be discussed early next year.
However a former CDU grandee, EU energy commissioner Günther Oettinger, has said a package would probably be a “small two-digit billion” range.
Greek finance minister Yannis Stournaras has been quoted in the Athens media as saying that his government may require an additional €10 billion.
Meanwhile, Mr Steinbrück has criticised Dr Merkel’s strategy in the NSA scandal, amid fresh allegations of illegal eavesdropping of EU and UN communications.
He told ARD that, if elected, he would freeze EU-US trade talks until the matter is clarified.
