Germany flexes its muscles over Greece bailout

Julian Harris
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GERMAN Chancellor Angela Merkel has returned from holiday to a familiar scene of strife in the battle to hold together the beleaguered Eurozone.

A senior political ally of Merkel’s yesterday issued a stark warning to Greek officials, insisting that Germany will withhold further aid payments if the indebted Mediterranean state does not stick to the conditions of its bailout.

Meanwhile there were reports that Germany’s constitutional court could face a delay in ruling over the legality of Brussels’ new permanent rescue fund, after a complaint was filed by a Berlin-based Eurosceptic group.

After holidaying in neighbouring Austria, Merkel now faces weeks of managing renewed tensions between the Eurozone’s core economic powerhouse and its struggling crisis-threatened member states.

“Even if the glass is half full, that won’t be sufficient for a new aid package. Germany cannot and will not agree to that,” said Michael Fuchs, the deputy parliamentary leader of Merkel’s Christian Democrats (CDU).

The troika of lenders – which consists of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – is set to decide on the disbursement of the next tranche of money from Greece’s €130bn (£102.2bn) bailout package next month.

“We long ago reached the point where the Greeks must show they are capable of delivering a shift. A policy of the last, last, last chance won’t work anymore and must come to an end,” Fuchs added.

Yet Germany received its own warning from the European Commission yesterday, according to the FT Deutschland. Brussels wants Germany to shrink its current account surplus.