The Emnid poll for the Bild am Sonntag mass circulation weekly showed 51pc of Germans believed Europe's top economy would be better outside the 17-country eurozone. Twenty-nine percent said it would be worse off, AFP reports.
The survey also showed that 71pc of Germans wanted Greece to leave the euro if it did not live up to its austerity promises.
Economy Minister Philipp Roesler told Bild am Sonntagthere were "considerable doubts whether Greece is living up to its reform promises."
"The implementation (of the reforms) is faltering. There is still no functioning tax office. Also, almost nothing has happened in terms of the promised privatisation of public assets," Mr Roesler told the paper.
He said: "If Greece does not fulfil its obligations, there can be no more money. Then Greece would be insolvent."
Mr Roesler and his party - junior partners in Germany's ruling coalition - have frequently expressed doubts about whether Greece is prepared to follow through with the painful reforms necessary to stay in the single currency club.
Greece is under immense pressure to carry out a structural reform programme, part of a package worth billions of euros that have been keeping its economy alive since 2010.
The audit report will determine whether Greece will receive the next tranche of €31.5bn from its aid programme that it needs to keep the economy afloat.
Finance Minister Wolfgang Schaeuble reiterated Berlin's line that the reforms must be carried out to the letter.
"The aid programme is already very accommodating. I do not see room for further concessions," the minister told the Welt am Sonntag weekly in an interview.
The head of the country's chambers of commerce called for an end of the debate about Greece's continued membership of the euro.
"We think it is wrong that, in Germany for example, there is a daily discussion about whether Greece should leave the euro," Martin Wansleben told local agency DPA in an interview.
" That's not our business. It's up to the Greeks to decide," he stressed.
On 20th August, the Greek government will have to borrow 3.2 billion from one arm of the Eurozone (from the EFSF) in order to repay another (the ECB). Yet Greece is insolvent. The very idea of an insolvent entity borrowing more from a community, like the Eurozone, in order to repay that same community is obscene. All it does is to shift the burden from the Central Bank to the taxpayers of Germany, Holland, Austria and Finland. This is not an act of solidarity with Greece. It is an act of irresponsible kicking-the-can-up-a-steep-hill. The simple point I have been trying to drive home for a long while now is that the Eurozone must make a simple decision: Either to give Greece a proper chance of exiting its current death spiral. Or to dump Greece now, before the Greek state loses all its remaining assets and before it gets deeper into debt. And if our Eurozone partners are not prepared to make up their minds (caught up in their own short term concerns and shenanigans), then Athens must force their hand to decide within the next 23 days. How? By announcing that Greece will NOT be borrowing on 20th August monies it cannot repay under the present scheme of things.
The other day I published an extensive article in Greek making this point (see here). Today some good people, unknown to me, have re-posted that article in German (click here). English speakers can read it by using Google Translate (which does a decent job of it). Meanwhile, here is how I described the Eurozone’s dilemma concerning Greece on BSkyB (Sky News). The footage comes from the eve of the Greek parliamentary election (16th June). But it is still pertinent, I think.
“We just showed that good news is possible in Greece”, said a beaming Greek minister the other day when it was announced that the European Investment Bank (EIB) was about to start funding investments in Greece again, after it withdrew toward the end of 2011 (in fear of losing its triple-A rating by associating itself with investments in an economy due to be thrown out of the Eurozone). Surely this is good news. Nonetheless, as is Europe’s wont, what one arm makes the other destroys.
Let’s begin with what the EIB’s ‘reactivation’ in the Greek context means, in terms of euros and cents. Around 600 million euros will be channelled into Greek SMEs (small and medium sized firms) during the remainder of 2012 (if all goes well and the transmission mechanism miraculously, in view of past failures, works). Then, during 2013 another 400 million will be added to the SME-reinforcement program, with a further 400 million to be disbursed over the two year period of 2014-5. Additionally, 500 million worth of guarantees will be offered to infrastructural projects that have ceased up over the past two years, courtesy of the collapse of private investment and bank credits.
Of the above figures, the very first one is the one that matters: the 600 million that was announced for the coming autumn. The reason I am saying this is that the Greek economy is in turbocharged meltdown and autumn will prove particularly trying and cruel. It may very well be the turning point, involving a truly awful ‘turn’. Let us now juxtapose this figure, of 600 million euros to be provided by the EIB, to some other telling numbers.
The first figure is 12 billion euros. It represents the monies due to Greece by Brussels – as part of the structural funds that Greece was eligible for for the period 2007-2013 and which were not spent as a result of (a) bureaucratic failures and (b) the ongoing Crisis that prevented the Greek state and Greek private companies from putting up their share of the funding. More precisely, Greece was eligible for 20 billion of which only 8 billion were disbursed. Now, of the 12 billion unspent funds the EIB has been given the go ahead to disburse 1.44 billion – a pittance by comparison. In summary, 10.56 billion euros earmarked for investment spending in Greece by Brussels back in pre-Crisis 2007 has boiled down to 1.44 billion at a time when the Greek economy has not only been starved of investment but has lost its credit market to boot.
The second figure is 900 million euros. It is the sum of money that the bankrupt Greek state must borrow by 20th August (2012) to hand over to the ECB as profit. As profit? Yes, as profit. Here are the details. In the summer of 2010 the ECB began purchasing in the secondary market Greek, Irish and Portuguese bonds in a failed attempt to avert the three member-states’ bankruptcy. Now, some of these bonds are maturing. The 3.2 billion bundle of Greek government bonds that expires on 20th August was purchased by the ECB at a 30% discount. However, the ECB is expecting the bankrupt Greek government to redeem at par these bonds (even though Greek banks, individuals and pension funds sustained a haircut of 75% on these same bonds). In effect, the ECB is demanding that the Greek government borrows during this hot and brutish summer 900 million euros to hand over to ‘our’ Central Bank as profit!
And as if this were not enough, the other day the ECB announced that it will no longer accept the new (haircut) Greek government bonds as collateral for the provision of liquidity to Greek banks; thus, pushing them into the arms of the Greek Central Bank’s ELA (a move that is destabilising further the European Central Bank System and, additionally, increases the cost of funding of the already distraught Greek banks; at a time when the circuits of credit in Greece and dead and buried).
When all is said and done, the picture that emerges is one of a Europe with an arm that is meekly trying to fix things while the other arm is violently destroying whatever the benign limb is putting together. The EIB announces a 600 million euros of SME funding from 1st September (tiny compared to Greece’s unspent structural funds) at the same time that the ECB (a) pulls the remaining piece of the rug from under the Greek banks and (b) demands of the Greek state that it borrows from the EFSF 900 millions so as to hand them over to it on 20thAugust as a pure profit payment. Does this sound like sensible policies of a currency union in trouble? Or does it look like the last stages of a currency union that has lost the will to live?
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