Greece’s survival is vital for the euro zone and the global economy.
That’s the view of the country’s Finance Minister Evangelos Venizelos, who thinks the Greek economy will shrink by 3.9% this year, slightly more than forecast, before returning to growth in 2012.
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Venizelos said Greece, the debt-ridden euro zone country needs to change its fiscal system.
“In the frame of our international obligations we can make changes in cooperation with our partners in order to achieve the necessary social cooperation. This is very important not only for political, economic, reasons but also for moral reasons, because for every citizen the most important point is the participation.”
This group of German Eurosceptics don’t believe Greece and other indebted euro zone countries, Ireland and Portugal, should have even received bailouts.
The six have launched a legal challenge at Germany’s top court, as they believe the multi-billion euro aid payments went against EU treaties.
Wilhelm Hankel, one of the plaintiffs, says:
“The German people are being lied to. They’re being told this is a way of saving the euro. It’s not saving the euro, rather it’s saving banks’ debt claims. I find this obscene.”
Germany’s Finance Minister, Wolfgang Schaeuble, attended the hearing to defend the government. He told the court that Europe had to act in 2010 to prevent contagion and to protect the euro.
Germany’s Federal Constitutional Court is unlikely to block Berlin’s participation in any future bailouts. But legal experts say it will probably set conditions for passing new aid.
Germany is Europe’s economic powerhouse and pays for over a quarter of the bloc’s bailout bill. Germans are becoming fed up with rescuing other euro zone states that they think have spent beyond their means.
As the second Greek rescue package is being drawn up, many in Germany are now asking whether Europe’s largest economy is looking to play a smaller role in the bloc’s ongoing debt struggles.
Bottom line: Germany’s highest court begun hearing legal challenges, brought by six eurosceptics, against the country’s role in bailouts of indebted euro zone countries, just as a second Greek rescue is being drawn up.