German chancellor Angela Merkel said today it will take at least a decade for Europe to pull itself out of the debt crisis, but she sees “no reason to be pessimistic” if everyone “applies themselves and does their homework”.
Ms Merkel devoted her weekly podcast to reassuring Germans that despite a week of rattled markets and drama in Greece, Europe’s debt crisis can be managed with time and effort.
She said: “This debt crisis will not simply go away,” but it will “certainly be a decade before we are in a better position”.
She added despite the turmoil, she saw “no reason to be pessimistic” and insisted that if Europeans band together, “everyone makes an effort and does their homework” they will pull through.
Former chancellor Gerhard Schröder today said Ms Merkel had belatedly demonstrated leadership in the crisis and that her approach was correct, even though she faces resistance from her party and from the public
In an interview, Mr Schröder also defended his government's controversial decision to break the European Union Stability Pact rules in 2003/2004 on the ground that his economic reforms caused short-term pain but long-term gains for all of Europe.
"The chancellor has belatedly taken on European responsibility," said Mr Schröder, who was chancellor of a centre-left coalition from 1998 to 2005 and is now a business executive in his home town of Hanover.
"And she's now running the risk of hitting resistance from her party and voters," added Mr Schröder, who is also seen as an elder statesman in his Social Democrats (SPD) party.
“But it's the right thing to do, to risk losing your office to fight for important convictions." He praised Greek prime minister George Papandreou for doing exactly that.
Mr Schröder lost the support of the left wing of his party and then the electorate by pushing through economic reforms, known as "Agenda 2010", that cut unemployment and spurred growth by trimming back on a generous welfare system.
Ms Merkel has faced widespread criticism in Europe and Germany for dithering in the early stages of Europe's sovereign debt crisis, exacerbating the problems.
But in recent months she has taken a bolder stance, putting her centre-right coalition of Christian Democrats (CDU/CSU) and Free Democrats (FDP) at risk in order to push through euro zone rescue measures.
In a rare interview, Mr Schröder also criticised Ms Merkel's government for repeatedly changing its position.
He ridiculed the way coalition leaders often insist that some action is "taboo" before agreeing to it weeks later.
"Whenever anyone in this German government speaks about a 'taboo', then we all know a few weeks later that won't be a taboo any more," Mr Schroeder said, saying this was partly why the German public had grown wary of EU rescue efforts for Greece.
“This is a development that's not good for Europe," he added. "That's something they should keep in mind."
Mr Schröder (67) acknowledged Greece might not have been admitted to the euro zone had EU leaders been aware of the depth of its fiscal problems.
Asked if it had been a mistake to admit Greece, he said: "If one had had complete clarity about the economic situation back then, the decision (on Greece) might have been different," he said.
PA/Reuters