Friday, July 19, 2013

Greece: hate figure Wolfgang Schäuble succeeds with unlikely charm offensive


Helena Smith in Athens, Friday 19 July 2013 07.58 AEST

German finance minister – loathed for the austerity he has personally prescribed – pulls off a stellar performance in Athens

German Finance Minister Schaeuble in Athens

German finance minister Wolfgang Schäuble (left) shakes hands with Greek finance minister Yannis Stournaras in Athens. Photograph: Pantelis Saitas/EPA

It was Otto von Bismarck, Germany's first chancellor, who said politics was the art of the possible.

In Athens, pushing his wheelchair along craggy pavements and the dark corridors of the Orwellian behemoth that is the finance ministry, Wolfgang Schäuble, the German finance minister, would have made Bismarck proud.

In Greece Schäuble is a hated man; loathed as much for the austerity he has personally prescribed as the manner with which it has been handed out. No one is more identified with the twin ills – runaway unemployment and rising poverty – now bedevilling the county than he. To pretend otherwise is to play a fool's game.

But on Thursday Schäuble pulled off a stellar performance doing just that as he made his first visit to the country since the eruption of Europe's debt crisis in Greece in late 2009.

The political opposition may have declared him persona non grata. And riot police may have turned Athens into a garrison town, its roads sealed off in one of the biggest security cordons thrown around the capital in living memory.

But responding with a charm attack few would have thought possible for a politician more usually associated with irascibility, in meeting after meeting Schäuble pressed home the message that he was "happy" to be in Greece – and even better, delighted with the progress its debt-stricken economy had made.

"This visit is an expression of our confidence in, and support for Greece," he enthused. "I have not come as a teacher to give lessons."

The assembled press pack – including his retinue of German reporters – looked on bewildered.

"He's actually smiling," said one photographer as Schäuble joked with his Greek counterpart Yannis Stournaras at the end of a press conference. "I didn't know he had it in him."

The trip, barely two months before federal elections in Germany, was aimed at sending a "message of support to Greeks", Stournaras said.

"He is here to talk to the Greeks and to listen to our views," the minister insisted. As a sweetener, Schäuble had pledged €100m in loans to kick-start business activity in an economy stripped of liquidity.

But on the streets of a capital that resembled a ghost town for most of the day, there were few – if any – who believed him.

Almost four years into their country's worst crisis in modern times, Greeks are numb with fatigue, exhaustion and fear.

Even officials in the governing coalition who in private say Schäuble has been nothing but "rude and aggressive" were hesitant to support the German on Thursday.

Instead, they admitted that Greece was locked in an economic death spiral – its indicators going from bad to worse – as a result of the punitive medicine Berlin was determined to mete out.

"This is nothing but a PR campaign, an attempt to say Greece is a success story and the euro zone crisis is over," a senior prime ministerial aide confided.

"And we all know that is not the case because it's only now, in the coming months, that we will even begin to see the results of the measures."

The decision to lay off 25,000 workers from the public sector – cuts which Schäuble has backed assiduously – could, officials fear, be the last straw.

With unemployment approaching 27%, about 1.3 million people are already out of work.

The devastating figure comes on the back of Greeks already having seen their salaries slashed by 25% and taxes increased tenfold.

As parliament debated the cuts this week, the radical left main opposition party warned that the country was not only "under German occupation" but heading for civil war.

"We no longer have an audience. Greek people have given up believing there is an alternative that could be worse," said another insider with close access to the political elite. "They believe this is the worst case scenario and that's scary."

The German finance minister may have pulled off the impossible but he had done so in a country that remains a minefield in the euro zone.

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