Aug. 26 (Bloomberg) -- Chancellor Angela Merkel’s main challenger in next month’s election said Germany will again have to pay the bill to save the euro and that the chancellor has failed to alert voters as a third Greek rescue looms.
Social Democrat Peer Steinbrueck said Merkel should have been up front about the cost of rescuing the euro area since 2010, when the first bailout package was set up. Greece will “most likely” need new funds, Finance Minister Wolfgang Schaeuble said, adding that the amount will be “much lower” than previous packages and won’t be determined until next year.
“Germany will have to pay for the stability of Europe and the euro zone,” Steinbrueck told ARD television in an interview yesterday in Berlin. He said talk of another Greek package showed that “crisis strategy up until now hasn’t lit a spark, but rather has failed.”
Greece continues to dominate the German campaign less than four weeks before the Sept. 22 vote, as the SPD escalates its attacks over Merkel’s crisis response in a bid to narrow the chancellor’s lead in most polls. With the European debt crisis in its fourth year, Merkel’s party allies have begun to address openly the prospect of a fresh Greek aid package.
Steinbrueck’s SPD advanced a percentage point to 25 percent, behind Merkel’s Christian Democratic-led bloc, which held at 40 percent, according to a weekly Emnid poll for Bild newspaper yesterday. Merkel’s Free Democratic Party coalition partner dropped a point to 5 percent, while the SPD’s Green party allies stayed at 12 percent, according to the poll, which surveyed 2,755 voters Aug. 15-21. No margin of error was given.
Those numbers would leave Merkel struggling to maintain a majority with her current coalition, possibly forcing her into another “grand coalition” with the SPD. Merkel governed with the SPD from 2005 to 2009.
Schaeuble prompted the debate over Greece on Aug. 20 when he told a campaign rally that the debt-strapped nation will need a new program to meet sustainability targets. Steinbrueck said the comment exposed vulnerability for Merkel.
“Schaeuble unconsciously and somewhat in passing placed an issue onto the agenda that Merkel would rather have left out of the election campaign,” Steinbrueck told ARD.
The finance minister said at the weekend that he wanted to clarify that any fresh aid to Greece wouldn’t involve a second writedown of the country’s outstanding debt, which would fall mostly on public institutions such as the European Central Bank.
“I had to make clear that there won’t be a debt cut, but that doesn’t mean that nothing has to be done next year,” Schaeuble told visitors at his ministry’s open day in Berlin yesterday. “I wanted to avoid that anybody could say that this government isn’t saying what it knows before the election.”
European Union Energy Commissioner Guenther Oettinger, a fellow German Christian Democrat, went further. Greece will likely need a package in the “small two-digit billion” range from 2014 to 2016, he told Die Welt am Sonntag newspaper. That aligned with Greek Finance Minister Yannis Stournaras, who told Athens-based newspaper Proto Thema that Greece may need 10 billion euros ($13.4 billion) in aid.
Merkel repeated in an interview with Focus magazine that she “doesn’t foresee” a debt writedown for Greece, saying that such a move would create havoc and drive the appetite for private investors in the euro area to “near zero.”
“I would urgently warn against a debt writedown,” Merkel told the magazine in an interview published yesterday, saying that it could trigger a ‘domino effect” across the euro area.
Steinbrueck took up the debate to accuse Merkel of concealing from German voters the necessity of transfer payments to debt-strapped nations in solidarity.
“That Germany has long been in a liability union is uncontested -- and that’s something that Merkel should have explained to our citizens back in 2010, when she instead said that the Greeks won’t get a cent,” Steinbrueck told ARD.
Both candidates return to the campaign trail this week, with Merkel scheduling stops across seven states in cities including Ulm and Frankfurt. Steinbrueck, also at rallies in seven states, will continue his town-hall style “Straight-Talk” campaign in cities such as Hamburg, Bremen and Muenster.
Merkel and Steinbrueck will then convene in Berlin on Sept. 1 for the campaign’s only televised debate.
Merkel last week sought to shift the focus to the SPD’s plans to raise taxes on the wealthy, warning that such a move could jeopardize the country’s two-decade low unemployment.
Steinbrueck has so far failed to put a dent in Merkel’s popularity with a platform of wealth distribution and social justice. Little more than a quarter -- 28 percent -- of respondents to an FG Wahlen poll said they thought Germany would be more “socially just” under an SPD-led government. Just 18 percent said they expected the SPD to improve its score in the polls.
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