September 4, 2012
Wolfgang Schäuble is one of the most recognized figures of the European Union, a tough player in the field of Eurozone finance and the right hand of Chacellor Merkel in every meeting with economic scent. It is widely considered as stubborn, a kind of old-fashioned Christian-Democrat that follows the path of Helmut Kohl in terms of his political and negotiational leverage. But is he really a “tough guy” and has he always been so obsessed with a certain view about Greece?
In the beginning of 2010, when Greece was negotiating the first rescue plan, Schäuble was supporting the Greek government of George Papandreou and he had thorough contacts with the then Greek Minister of Finance George Papakonstantinou. The latter was regularly visiting him in Berlin and were discussing about the steps to follow in order to address the Greek crisis. At that period of time, Schäuble was eagerly supporting a vast rescue plan for Greece that would entail a specific growth strategy alongside the bailout package, a position that Chancellor Merkel was hesitating to endorse. It is in May 2010 that Schäuble called George Papandreou to express his commitment that Germany would do whatever it takes to set up a financial and stability mechanism so as to prevent a Greek collapse.
It is worth mentioning that during 2010 Schäuble had not the current leverage as Minister of Finance and his voice while being heard, it was not literally taken into strong consideration. It was only somewhere between the end of 2011 and the beginning of 2012 that his stance was starting to change dramatically and his power to grown excessively. In that very period we put the shift of his behavior towards Greece, a shift that made him change opinion about the future of Greece in Eurozone. Schäuble started to doubt about the ability of the Greek government to bring structural and deep reforms and changes in the economy, and there were many times during the last months of 2011 that he was repeatedly insisting on the then Greek Minister of Finance Euaggelos Venizelos to find a common solution so that Greece to exit smoothly from the Eurozone.
His ultimate shift was also pinpointed by his obsession towards Greece to avoid going to elections and continue with the current coalition government of the ex-Vice President of the European Central Bank Lucas Papademos as he was believing to his commitment to carry Greece on track -at least on a controlable mode. Notwithstanding, the shift of Schäuble’s position over Greece seens to be completely relevant with the shift of Chancellor Merkel’s standpoint about Greece: as Schäuble was becoming less flexible about the chances of Greece being in Eurozone, Chancellor Merkel was appeasing her rhetoric toards buying time and pondering about the side-effects of a possible Greek exit for the Eurozone altogether.In this respect, there is a widespread belief that Chancellor Merkel has had a positive feeling over Greek Premier Antonis Samaras, but still the domestic issues pertaining the German debate over Eurozone seem to designate and influence Merkel’s viewpoint over possible punishment of Greece so that the rest of the overdebted states to have the possibility to enter into a larger sharing basket in terms of fueling and concentrating funds and attention to the other bigger debtors of the Eurozone economy: Italy and Spain.
We do have to point out here that both were affected by the flunctuations of the market and the scary precedent of the collapse of Lehamn Brothers in the United States. For Germany Lehman Brothers was, and still be Greece. For that reason, Schäuble’s deep conviction that Greece cannot choose a way other than exiting Eurozone due to its incapable governance is something may consider as a barometer for future decisions in the monetary union.
After all, the major drawback for the future of Greece in Eurozone is its own deeds -or better the lack of deeds- that have formed Schäuble’s transforming stance. Therefore, the German Minister of Finance is not the problem for Greece. The problem is its government who has proved to be for the moment not courageous enough to change the general feelings in Germany and combat striking and chronic deficiencies in its economy like tax evasion. The next question is whether Greece can do something or it will be left suffering inside a carrot-and-stick strategy.Dimitris Rapidis