ATHENS — Maybe the German leader meant to reassure Greece when he promised emergency assistance of food and medicine. But to many in the embattled Mediterranean nation, it sounded more like a threat.
The hard line on Greece adopted by Europe’s economic powerhouse has, if anything, strengthened in the days since Greek voters resoundingly rejected tougher cuts, sending shock waves through the continent.
Now Germany is refusing to budge on cutting Greece’s mountain of debt, even as the leftist leadership here — and the International Monetary Fund — insist that no deal is viable without such a reduction. This tough stance comes from a rules-oriented nation where even the language is conspiring against Greece’s struggles: Germans use the same word for “debt” and for “guilt.”
“Of course we do not want to abandon the Greeks, but they do not have to be a member of the euro zone in order to receive help,” said Christian von Stetten, a lawmaker from German Chancellor Angela Merkel’s Christian Democratic Union, summarizing an increasingly prevalent view in the German capital.
“If, from the very beginning, there had been sanctions for not sticking to the rules, we would not have this problem,” von Stetten said. He noted that Greece was not the only member of the 19-nation euro zone to run afoul of the thicket of regulations that govern borrowing and spending in the monetary union.
The mounting German anger after the Greek referendum on Sunday is a major challenge for Merkel, who, as the euro zone’s most powerful leader, needs to hold together its fractious members while preserving her domestic standing. She does not want to be blamed for a sudden Greek exit from the euro zone, but giving away too much would cost her at home.
France and others are starting to break away, calling for a softened deal in the aftermath of the referendum. Merkel’s electorate, however, has had no such turnabout. Nor have her political allies.
“Today we need the Iron Chancellor: No new billions for Greece!” read the front-page headline in Tuesday’s Bild tabloid, the top-circulating newspaper in Germany. It was accompanied by a doctored image of Merkel sporting a spiked helmet of the kind worn by Otto von Bismarck, the 19th-century leader who conquered Europe to build the German empire.
“A lot of people in the government have moved toward the position where they say, ‘Let’s get rid of them no matter what,’ ” said Sebastian Dullien, a senior policy fellow at the European Council on Foreign Relations in Berlin.
Many Germans say that without steely regulations to govern the conduct of European nations, the 63-year-old project to integrate the continent would swiftly fall apart. Giving in to populists in Greece would embolden others like them in places such as Spain and Italy, they say, and soon there would be a wave of political and economic upheaval across Europe.
Merkel has repeatedly shot down Greek bailout proposals that insist on debt relief. As the clock ticked Tuesday on the collapse of the Greek banking sector, she again said ahead of a meeting of euro-zone leaders that she did not see any basis for negotiations.
The tough approach aligns well with Germany’s broader attitudes toward rules and predictability. Germany is a nation where jaywalking is rare, even when streets are clear of cars, and where most subway stations use the honor system, operating without turnstiles.
The adherence to rules is such a key tenet of life there that many Germans say they would rather send humanitarian aid if Greece goes bankrupt than forgive its debts and risk breaking the covenant that when money is borrowed, it must be repaid.
Until the introduction of the euro, bankrupt individuals in Germany could wipe out their debts only after 30 years. Credit card usage in the country is among the lowest in Europe, and even many big-box stores there take only cash.
That maximalist approach toward Greece, however, could prove costlier for German taxpayers, because the struggling nation would be unable to repay Germany’s $88 billion share of European rescue loans if it went bankrupt. A debt reduction would slice only a share off Greece’s towering obligations.
But many German leaders are dead set against compromise.
“Greece’s entry into the euro zone was very naive from today’s perspective,” German Vice Chancellor Sigmar Gabriel told the newsmagazine Stern on Tuesday. Gabriel is also the leader of the center-left Social Democrats.
“Nothing is gained if we just cut debt without fundamental changes in Greece,” Gabriel said. On Monday, he said E.U. countries needed to start readying humanitarian aid for Greece. He spoke from his party’s headquarters in Berlin, where red flags still fly and Karl Marx’s images adorn office walls. Similar parties in other countries have long favored stimulus spending and fought austerity, so his position is emblematic of the stark differences in German discourse.
If Greece exits the euro zone, the aid may well be necessary. Greece imports much of its food and almost all of its medicine. Without a working banking system, or with a sharply devalued new currency, Greeks would struggle to pay for the basics while the cost of imports would rise sharply. After just over a week of capital controls that prevent Greeks from sending payments outside the country, shortages of staples are starting to appear.
Some critics say that Germany’s aversion to softening Greece’s debt obligations ignores its own history. In a recent interview with Germany’s Die Zeit newspaper, economist Thomas Piketty pointed to Germany’s post-World War II debt restructuring. That deal, done under different circumstances, wiped away about half of what Germany owed other nations, including Greece.
As basics dwindle on the shelves of Greek supermarkets, Merkel is playing a tricky balancing act, with much to lose if she takes a strong stand on either side of whether Greece should remain in the euro zone. Her legacy would suffer if she were seen as kicking the Greeks off the common currency. But if she advocates debt relief, voters may punish her at home. Already, her even tougher finance minister, Wolfgang Schäuble, has started to surpass her in popularity polls.
Merkel “wants to avoid it being her to decide over this,” said Stefan Kornelius, author of a biography of the chancellor. He also wrote a column published Tuesday saying it was time for Greece to leave the euro zone.
“She wants the Greek government to decide. She set the rules, and she wants Greece either to commit to it or leave it,” Kornelius added.
Stephanie Kirchner in Berlin contributed to this report.