Greek default could cost the Germans

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IOL bus nov24 Peer Steinbrueck AFP Peer Steinbrueck.

Berlin - German chancellor candidate Peer Steinbrueck warned in a newspaper interview released on Saturday that German taxpayers could get stuck with a large bill if Greece were to default on its loans.

Steinbrueck told Bild am Sonntag newspaper that Germany has so far only provided loan guarantees for Greece but that could end up costing German taxpayers billions of euros. He said the government should make that fact clear to the public at home.

“One must tell the people that Greece could default on these loans,” said Steinbrueck, who will lead the centre-left Social Democrats (SPD) candidate against Chancellor Angela Merkel in next September's federal election.

“We in Germany have to make sacrifices to help hold Europe together. We're already part of a 'liability union',” he added.

Many Germans, especially conservatives who support Merkel's Christian Democrats (CDU), are firmly opposed to any sort of collectivised debt in Europe and especially the creation of euro zone bonds.

Steinbrueck said “so far Germany has not paid a single cent” to Greece but added it was quite possible that could change.

“We were ready to pay money for the costs of German reunification - something all of our neighbours welcomed despite the bad experiences they had had with us,” he said, referring to Germany's Nazi past. “Now is time that we have to ask ourselves the question: what is Europe worth to us?”

Steinbrueck said that Greece will not be able to return to the capital markets for another eight years.

“We're going to have to build a bridge for this period and that's going to cost money,” Steinbrueck said. -Reuters


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