The decision by the European Union and the International Monetary Fund to bailout Greece’s flailing economy has dug up divisions among member states.
It is clear that the 110 billion-euro package, designed to avert a Greek debt default that could have siginificant ramifications for the EU, is considered the right thing to do among leaders, but they are not happy about doing it.
There is even concern that Greece could abuse the rescue package, despite the benvolence of its neighbours.
“It is the task of this government to configure this stability pact in such a way as to ensure that it cannot be undermined and that it is strictly adhered to,” German Chancellor Angela Merkel said, while announcing Germany’s 22.4 billion-euro aid package.
“The lessons must be learned from this situation,” she said.
The package will go before the German parliament, which has been berated for being too slow to react to the crisis, on Friday.
Other countries, including France and the Netherlands have called for a toughening-up of rules to ensure that no other country in the European super-state finds itself in a similar position.
“It is important to learn from this situation and to look anew at the European rules of the Stability and Growth Pact,” Dutch Finance Minister Jan Kees de Jager said in a statement.
The French Finance Minster Christine Lagarde echoed her Dutch counterpart’s calls.
“When it ends up costing you 110 billion euros, you do change your approach,” she told Le Monde newspaper.
She also expressed some cynicism about Greece’s willingness and ability to achieve significant reform, rejecting claims that Spain and Portugal could face a similar economic disaster due to their deficits.
“They are not at all in the same situation,” Lagarde said.
“They did not provide false figures, talk nonsense over their deficits.”