In These New Times

A new paradigm for a post-imperial world

Merkel calls for European ratings agency

Posted by seumasach on July 18, 2011


18th July, 2011

German Chancellor Angela Merkel joined the choir of European leaders calling for the introduction of a European ratings agency and expressed her scepticism over Greek sovereign debt restructuring.

In an interview with German public broadcaster ARD, Merkel backed the previous statements of her Finance Minister Wolfgang Schäuble, who voiced his desire to diminish the power of rating agencies, following the Moody’s and Fitch downgrades of Portugal’s and Ireland’s debts to junk status last week.

Chancellor Merkel reiterated that “the Chinese now have a ratings agency” and emphasised that the European agency should be structured upon the “European economy”, not by individual member states.

Referring to the possible rescheduling of the Greek debt, she expressed her fear that it would have a “negative effect that the country might not work hard” on the much-needed reorganisation of the economy. Merkel admitted the situation was “very, very difficult” and conceded that debt restructuring remained one of the options.

She repeated that private-sector creditors should bear a portion of the bailout package and confirmed that she would stress this at the European Council on 21 July. Merkel pledged security of the common currency, praising it also as a “part of the European identity”.

The rumours have been circulating in the last couple of days of a harsh criticism of Helmut Kohl on Merkel’s account even quoting him saying she “ruined his European dream”, sparked by then unpublished piece in Der Spiegel.

The former Chancellor and one of the pivotal figures of European integration denied making derogatory remarks about Merkel, who he had a “father-like” relationship with, he said in a statement on 17 July.

Kohl said that what he is concerned about is “that the supposed euro crisis is not understood as a structural crisis of the euro but what it is – the result of home-made mistakes of both sides, Europe and the member states”, adding that whoever “solves mistakes to make the euro Europe’s future“ will have his undivided support.

However, Chancellor Merkel was criticised over a perceived lack of strategy to deal with the Eurozone crisis by the President of the German Bundesbank Jens Weidmann. He was followed by Kurt Lauk, economic spokesman of CDU, Merkel’s and Kohl’s party, who blamed growing public displeasure with bail-outs on poor communication of national interests in the Eurozone rescue.

Opinion polls show that CDU and Merkel are losing ground to both the SPD and the Greens, so it remains to be seen whether Merkel will shatter Kohl’s dream of Europe, or her own of a third term as Chancellor.

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