U-turn by Germany for Greece

The «Der Spiegel» magazine reveals a letter by German Finance Minister Wolfgang Schäuble to his colleague Federal Minister of Economics Phillip Rösler, in which he calls for joint action so that countries in crisis get bilateral support in development issues through the German state investment bank KfW.

According to the news story, there is a shift as «the federal government is removed from the austerity policy in Southern Europe and the Chancellor and the Minister of Finance want to stimulate growth with new money for the countries in crisis».

The story even says that what motivated the German government is high unemployment. «Unless we act now, the South of Europe will lose a whole generation», Schäuble environment says as the story’s authors say, and add that «Merkel and Schäuble are now willing to abandon fixed positions until now of their philosophy on bailouts».

«I believe that we must assist in a bilateral way as well from Germany», Schäuble wrote in his letter to Rösler and added that from this kind of help he can expect «a support that will work noticeably faster and will have significant and psychological outcomes in a reasonable time».

KfW bank will be called play a key role in the development plan initially for Spain, which could then serve as a template for Portugal, perhaps for Greece as well.

The fact that both the German Chancellor and Finance Minister appear willing to take action, the story continues, is associated with an «inner» folder of the Chancellery, which describes the assessment for the European growth pact agreed last year.

«This report would have shown how well the German rescue strategy is performing», says the Spiegel story, but the results were negative, although more positive for reforms in countries such as Greece and Portugal. «The calm ascertainment of German officials is that everywhere changes need time until they reach the real economy».