Steinbrueck Says Merkel’s Euro Mess Has to Be Cleaned Up

Photographer: Krisztian Bocsi/Bloomberg

Peer Steinbrueck, opposition Social Democratic Party (SPD) candidate for German chancellor, poses for a photograph outside his office following an interview in Berlin on Aug. 12, 2013. Close

Peer Steinbrueck, opposition Social Democratic Party (SPD) candidate for German... Read More

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Photographer: Krisztian Bocsi/Bloomberg

Peer Steinbrueck, opposition Social Democratic Party (SPD) candidate for German chancellor, poses for a photograph outside his office following an interview in Berlin on Aug. 12, 2013.

German Social Democratic chancellor candidate Peer Steinbrueck said he’s going to have to clean up the mess created in Europe by Angela Merkel’s “one-sided” solution to almost four years of crisis in the euro region.

Steinbrueck, 66, speaking in an interview on the eve of Merkel’s return to official engagements in Berlin today, said the “therapy” of budget cutting prescribed by the chancellor against the debt crisis that began in Greece in late 2009 has prompted a European rift, with “a downward spiral above all in southern Europe.”

“Many countries have the impression that Germany is using its economic and political clout to impose its crisis management on other states,” Steinbrueck said yesterday at the SPD’s headquarters, Willy-Brandt-Haus, named after the chancellor known for his Ostpolitik, the policy of pursuing rapprochement with Eastern Europe. “Germany must contribute much more strongly to the stabilization of Europe,” he said.

Steinbrueck, whose SPD trails Merkel’s Christian Democratic bloc by 13-17 percentage points in polls, is attempting to turn Merkel’s handling of the crisis to his advantage at the Sept. 22 ballot. While surveys suggest voters back the chancellor’s crisis-fighting efforts, Steinbrueck, her first-term finance minister, says she isn’t telling the electorate the truth about the costs that will need to be borne.

“Merkel is lulling the voters, she isn’t challenging them,” he said. “Who wants to be confronted with challenges in summer? That’s tiresome. I’m tiresome, the SPD is tiresome.”

‘Chief Mistake’

A policy of consolidation and economic “impulse” is needed similar to that pursued by the grand coalition government in which he served from 2005-2009, Steinbrueck said. “That’s missing,” he said. “That’s the chief mistake.”

European structural and cohesion funds must be concentrated on southern Europe, with revenue from the proposed financial transaction tax used to create “a kind of Marshall Program 2.0,” he said.

As Merkel returns to the campaign trail with a live television interview at Deutsche Bank AG’s Berlin offices, Steinbrueck may struggle to lure voters with his message, according to Holger Sandte, chief European economist at Nordea Bank AB. He compares Merkel’s relationship with the electorate during the crisis as one of a trusted doctor and her patients.

Doctor Merkel

“They don’t exactly understand the diagnosis and the treatment not at all,” Sandte said in a note to clients today. “But they do trust that the woman doctor acts to the best of her knowledge.” That means “one needs very strong reasons to change the doctor,” he said.

Latest polls suggest opinion may be hardening. Backing for Merkel’s CDU and its Christian Social Union Bavarian sister party held at 39 percent, while the SPD’s 26 percent support was also unchanged in a weekly INSA poll for Bild newspaper today. The SPD’s Green party allies had 14 percent and Merkel’s Free Democratic Party coalition partner 5 percent, both also unchanged. The Left Party had 8 percent. INSA surveyed 2,121 voters on Aug. 9-12. No margin of error was given.

In the interview, Steinbrueck said that any Greek exit from the euro must be averted since it would carry “incalculable” risks as contagion rippled out to engulf Spain, Italy or France.

He spoke after the Finance Ministry under his successor, Wolfgang Schaeuble, dismissed a report in Der Spiegel magazine citing a Bundesbank document as saying that Europe may need to provide more aid for Greece as soon as this year.

Risks to the Greek aid program continue to be “extraordinarily high” and “considerable doubts” remain about Greece’s ability to implement reforms, the Bundesbank paper said, according to Der Spiegel.

“To let a country like Greece go isn’t like a chemistry experiment in a lab that can be at some point be regretted as a shame when it goes wrong,” Steinbrueck said.

To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net; Brian Parkin in Berlin at bparkin@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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