Opposition parties in Germany and the Netherlands sharply criticized their respective governments on Tuesday after European finance ministers agreed to push back Greece’s deadline for achieving its budget targets a day earlier.
Dutch prime minister Mark Rutte campaigned against extra financial support for Greece. German finance minister Wolfgang Schäuble rejected the notion out of hand. “More time means more money,” he said in a radio interview.
Now both governments have agreed to give Greece more time and more money. Estimates are that other European countries will have to spend another €44 billion to keep Greece from collapsing.
EU member states and the International Monetary Fund provided €110 billion in financial support for Greece in May 2011 and another €130 billion in October of last year. Half of Greece’s €350-billion debt has been written off.
The bailouts were conditioned on budgetary and economic reforms. However, Greece has consistently fallen short.
The government that came to power in Athens in June has committed to an additional €11.5 billion in spending reductions between 2013 and 2014.
Among the austerity measures are layoffs of contractors in the public sector, a cap on pensions, cuts in welfare benefits, reductions in tax exemptions and lower salaries for government workers.
Structural entitlement and labor-market reforms that should enhance Greek competitiveness in the long term remain stalled. A comprehensive privatization effort has yet to be initiated. Business confidence is fading. One out of five Greek workers is unemployed. Youth unemployment exceeds 50 percent.
Criticism from the left
Left-wing parties in Germany and the Netherlands believe that the current program is hopeless and further reductions in Greece’s national debt need to be made.
Frank-Walter Steinmeier, the leader of Germany’s Social Democrats, said, “The haircut is not avoided, it has been postponed until after the election.”
Criticism from the right
Conservatives are critical for the opposite reason.
An editorial in Die Welt newspaper laments Greece’s inability to enact market and tax reforms and argues that the country is being rewarded for it:
And what if it doesn’t stick to its agreements? Then there will be more night sessions and at the end of it — a haircut. Because that’s how a transfer union works.
The right-wing De Telegraaf newspaper in the Netherlands chastises Rutte for breaking his election promise and quotes nationalist Freedom Party leader Geert Wilders, who seeks to withdraw from the EU altogether, as accusing the premier of being “soft on Greece but hard on the Netherlands.”
Sybrand van Haersma Buma, the leader of the Christian Democrats, argues that Rutte shows a difference “face” in Brussels than in The Hague.