Merkel meets Hollande, then she meets Samaras, then Hollande meets Samaras

It seems we can not expect any solutions from these meetings, but what kind of message these three politicians in your opinion try to present to their counterparts and to public?

Miguel Otero-IglesiasAssistant Professor in International Political Economy, ESSCA – School of Management, Centre for European Integration

In my view these meetings are to clarify positions. Again, this is a game between creditors and debtors. The creditors (represented by Germany and France) are keen to get their money back through fiscal austerity and structural reforms, while Greece is trying to soften these conditions to reduce the pain of the adjustment to be able to grow, the only way to be able to pay back the outstanding debt. Samaras is under huge social pressure domestically because we have to remember that the Coalition of the Radical Left, Syriza, campaigned with the argument that the Memorandum of Understanding can be renegotiated and got a lot of support. In order to win further political suport in Greece, Samaras needs to show that he is doing what he can to achieve certain concesions from the creditors. The creditors on the other hand, especially Merkel in Germany, have social and political pressure at home to not soften their stand. In these talks we will see whether a certain compromise is possible. The possible outcome is that everyone gives in a bit but not too much to be seeing as weak at home.

There is talk that the creditors might reduce the interest rates that Greece needs to pay. This might be a acceptable solution to all the parts. Samaras can say that he got something out of the negotiations. Merkel can tell her constituency that Germany will not have to pay a euro more for the rescue (yes, Germany will lose on the interest, but this is more acceptable for the public), while Hollande might present himself as the broker of the deal. This would be a very European solution to this conundrum. It is a short term fix, but it is not a long term plan.

Jean-Marc TrouilleJean Monnet Chair in European Economic Integration, School of Management, Bradford University

In this cat and mouse game, everyone knows that the economic situation of Greece is unsustainable on the long term. But everyone also realises that a ‘grexit’ would be even costlier than to keep the patient on a drip. Antonis Samaras insists that Greece is not asking for more money, but for more time to implement painful reforms and cuts. It is in Chancellor Merkel’s interest not to appear lenient or flexible. Her party must face the electorate next year, and she is keen to avoid yet another vote at the German Bundestag on the issue of the Greek bailout. Hence her expectation that Athens will abide by the terms of the bailout.

This is all related to another important issue, which concerns the governance of the eurozone. Without agreement between Berlin and Paris, eurozone governance loses a great deal of credibility. Both Angela Markel and François Hollande know this. But after Hollande’s first 100 days on power, the Franco-German relationship is still in a period of adjustment. Both leaders realize that they need each other, but are still struggling to define a fine line between their diverging stances. This may need a bit more time, but in the end each one is aware that they will need to establish a compromise. What is still unclear is how far each party will give away in this negotiating game. Hollande has achieved some very limited success in embedding the issue of growth into the fiscal pact. But rather than becoming the leading country of a deeply endebted Southern eurozone, it is France’s interest to remain Berlin’s closest partner and preserve the Franco-German relationship. Hence Paris’ attempt to strike a balance between French preference for growth measures over austerity and recognising that Athens must pursue its tremendous efforts as a condition for bailout aid. The next important matter that will concern he Franco-German relationship will be how France envisages to meet its its own deficit targets at home and how far spending cuts and tax measures will be applied. Should Hollande fail to resist to pressures against austerity when drawing the French budget at the end of September, this would affect the Franco-German relationship.

Anna VisviziAssociate professor, DEREE – The American College of Greece

The Greek PM Antonis Samaras during his visit to Berlin:

• The Greek prime-minister is going to ask for more time to implement the fiscal consolidation programme and thus to meet its objectives; he is not going to ask for more money;

• By so doing, the Greek PM seeks to

• To restore the shattered credibility of Greece;

• To gain enduring support for the coalition government;

Note that – contrary to the previous governments of PASOK – the coalition government is really willing to implement the programme’s objectives and it undertakes honest efforts to implement the programme as agreed;

This visit is particularly important since it is the first visit of the Greek PM to Berlin, his first tête-à-tête meeting with Merkel after the June 17 elections, and thus the first opportunity to present the Greek status quo in his own words. As you remember, due to health issues (a very serious eye surgery), Samaras was not allowed to travel.

The German Chancellor Angela Merkel:

• By demanding full implementation of the programme and by emphasizing that any decision concerning Greece will be taken only after the Troika’s progress report will be published in September 2012, Merkel seeks to consolidate her credibility on the German political scene.

• By maintaining her tough and uncompromising stance toward the Greek case, Merkel seeks to solidify her defence line against the Eurobonds. In her view, as it seems, this is the best way to appease the markets and to serve the interest of the Eurozone.

• However, the described above line of argumentation that Merkel seems to be following, suggests that she is about to commit the same mistake as ever. That is, it seems that once again she misestimates (a) the meaning of the developments/situation in Greece, and (b) she misapprehends the difference between the coalition government (truly committed to the reform process) and the previous PASOK governments (purposefully avoiding structural reforms and misleading the Troika).

• Therefore, if A. Samaras’ argumentation is successful and he himself employs convincing arguments in his talks with Merkel, his visit may prove ground-breaking as regards the German stance toward Greece and the Greek government;

The French President Francois Holland:

• As regards the way of dealing with Greece, Holland largely follows the line delineated by Berlin;

• In his speeches, some overtones are placed on the social issues and the Greek crisis. Clearly, these discursive interventions are employed instrumentally to preserve the image of Holland, a president from the left;

Robert Ladrech, Senior Lecturer, School of Politics, International Relations & Philosophy, Keele University

First, these leaders’ message to their counterparts:

All three will stress that EU unity is at stake; Hollande has his party and left parties to convince that solidarity is as or more important than austerity. The French economy is more desperate for growth than Germany, so bringing the eurozone crisis – and Greece’s predicament – to a rapid closure is what he will stress to Merkel and Samaras. Merkel, for her part will stress EU unity and economic stability, but she is constrained by members of her party and coalition partner – the Free Democrats – to be rigorous as to the eurozone crisis, both to Hollande and Samaras. Ultimately, I don’t think she wants Greece to leave the eurozone, as this could initiate more uncertainty about the euro in general, and in the short-term more craziness with financial markets and speculation. Samaras, for his part, will stress EU unity – and of course his party is in the EPP along with Merkels CDU – so he will emphasise solidarity and fiscal restraint on the part of his government; but he needs the solidarity from Merkel in particular.

Second, their respective publics. Hollande right now has to demonstrate presidential character and show some success. He also has the left wing of his party as well as the other smaller left-wing parties – and probably public opinion – looking to see a solution that is, again, a mix or solidarity and fiscal prudence. Merkel has German public opinion that, in part, is a bit suspicious of bailing out Greece. This may be more the case with the type of public that reads sensationalist papers, i.e. Bild. The educated middle class see some self-interest in supporting Greece (and the eurozone) because everyone knows the German economy is export-led. Merkel also has a national parliamentary election next year, so her credentials as a cautious but sound politician is what she has in mind when speaking to Germans. Samaras needs to demonstrate back in Greece that he can make a difference in negotiating with EU leaders, otherwise there is no difference having him or a Pasok prime minister.

Fabian Zuleeg, Chief Economist, European Policy Centre

The key message is that there has to be a bit of give and take. While pressure will remain on the crisis countries, especially Greece, to carry out reforms, there is also a recognition that without growth the ambitious public finance targets will not be met. Merkel will have to compromise a little but she knows that she is facing a hard political battle back home.

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