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INTERVIEW-Greece must help itself, German state minister says

Published 02/23/2010, 11:42 AM
Updated 02/23/2010, 11:44 AM

* No automatic euro zone duty to help Greece, Nussbaum says

* Greece can expect support if it helps itself first

By Erik Kirschbaum

BERLIN, Feb 23 (Reuters) - Greece has to help itself out of its precarious fiscal situation and cannot expect Germany or the European Union to bail it out, a German state finance minister said in an interview with Reuters. Berlin's state finance minister Ulrich Nussbaum, who is the chairman of the conference of state finance ministers, said Germany would support international efforts for Greece but stressed there was no automatic obligation to help the country.

"Greece has to help itself," said Nussbaum. "In my view we can't give Greece an emergency parachute. But we can and must see how we can help Greece in ways such as in conjunction with the IMF that other nations have been helped in the past.

"It's not possible to give a country an emergency parachute just because it's in the euro zone," said Nussbaum, who is one of the 16 state finance ministers in Germany.

"I think it's right that Germany has been so cautious (on Greece)," said Nussbaum. Opinion polls show the German public overwhelmingly opposed to any Greek rescue.

The German government has said it has no concrete plans to give aid to Greece, denying a magazine report at the weekend that it had sketched out a proposal in which euro zone members would provide some 20-25 billion euros of support.

But officials in Chancellor Angela Merkel's ruling coalition concede in private that contingency plans have been drawn up should Athens be unable to service its debt.

"It's not that Germany is simply saying 'no'," Nussbaum said. "One has to be ready to help. But there is no automatic liability for Greece just because Greece is a euro zone country.

"If you start with Greece where does it stop? With Spain or Portugal?"

German Finance Minister Wolfgang Schaeuble is in charge of all international issues, including Greece. But the views of Nussbaum, who is not a member of any political party, are in line with sentiment in the Berlin government and across Germany.

Germany has worked hard to consolidate its public finances in recent years and is loathe to shell out for another country's fiscal mistakes, analysts say.

"Greece is having to pay the price now for the fudging they did when they joined the euro," Nussbaum said.

"It won't work that Greece turns over its responsibilities to Germany or the EU. In Germany we can't be held responsible for strikes in Greece.

"There is obviously a need to undertake something jointly to assist Greece. But there is nothing automatic about it. If Greece helps itself, it can expect support."

(editing by Ron Askew)

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