Reuters
February 21, 2012
The severity of conditions attached to Greece's 130-billion-euro bailout deal looked set to head off a parliamentary backlash over the package in Berlin but Germans are still concerned about Athens' long-term ability to meet the demands and repay loans.
Germany, the biggest euro zone contributor to the bailout, has taken a hard line in the tortuous negotiations with Greece, making Chancellor Angel Merkel a hate figure with some Greeks, with newspapers even printing montages of her in a Nazi uniform.
Facing public skepticism about another bailout, Germany, along with fellow hardliners Finland and the Netherlands, has come away with an agreement for stricter supervision of Greek reforms and a special escrow account for bailout funds.
That will make it easier for conservative Merkel to push the deal through parliament despite misgivings among lawmakers and voters, said economists.
"The Greek deal very much plays to the public in the northern European countries. Conditions for Greece are tough so that no other country will ever want to get into that position," said Christian Schulz, senior economist at Berenberg Bank.
"But what is not answered is if Greece will ever be able to repay the loan under these harsh conditions," he said.
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