September 15, 2011
German Chancellor Angela Merkel has called for a united front in her coalition government this week on the euro rescue package, but she has so far failed to rein her partners in. Economics Minister Philipp Rösler continues to draw criticism -- and some support -- for his statements about a possible Greek insolvency.
During an emergency telephone conference with Greek Prime Minister Georgios Papandreou on Wednesday, the German chancellor and the French president said that Greece is an "integral" part of the euro zone and that its future remains in the common currency. Angela Merkel and Nicolas Sarkozy also told Papandreou that "it is more indispensable than ever to fully implement the decisions adopted on July 21 to ensure the stability of the euro zone," a reference to emergency measures agreed upon to expand the euro rescue package.
At the same time, the German and French leaders called on Athens to "strictly and effectively" implement the reforms it had agreed to in exchange for billions in aid from the European Union and the International Monetary Fund (IMF). "This is a pre-condition for the payout of any future tranches," they said.
The statement helped to diminish fears of an imminent insolvency in Athens and buoyed markets in Europe and around the world in early trading on Thursday. What it didn't do, however, is ease a heated debate between Merkel and her government coalition partners in Berlin, who have been sparring all week over whether it is acceptable to publicly discuss the possibility of Athens going bankrupt -- statements that have unsettled markets and which, according to commentators, could cost Germany " billions ."
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