Eurozone dispute brews as G8 summit leaders gather
Published: 19th May 2012 02:57:52
Claims that German Chancellor Angela Merkel suggested debt-stricken Greece vote on whether it should stay in the eurozone have sparked a row.
The Greek allegation, which Berlin denies, comes as President Barack Obama welcomed G8 leaders to a dinner at Camp David, opening a summit expected to be dominated by the eurozone turmoil.
Mr Obama said talks on Saturday would promote a "strong growth agenda".
Investors fear a Greek eurozone exit could trigger a fresh global crisis.
The G8 leaders are expected to discuss Iran and North Korea's nuclear ambitions, and the unrest in Syria.
Athens said that Chancellor Merkel had suggested on Friday morning that Greece could hold a referendum on the euro when it votes in national elections next month.
The new spokesman of the caretaker Greek government, Dimitris Tsiodras, told me he had nothing to add since the earlier statement that Angela Merkel had discussed the referendum proposal with the Greek president.
If Chancellor Merkel indeed suggested a referendum on euro membership, it would be an astonishing about-turn. Last November, the then Greek PM George Papandreou formally proposed a referendum - ostensibly on the bailout, but it would have turned out to be on euro membership.
The idea caused outrage from Mrs Merkel and then French President Nicolas Sarkozy, furious that the Greek government could play such a potentially dangerous game with the euro. Mr Papandreou was forced to row back on the proposal - and it ultimately cost him his premiership.
Could Mrs Merkel's suggestion - if it stands (her office denies it was made) - be part of a high-stakes game of brinkmanship? Possibly. Berlin and others are obviously aware that the vast majority of Greeks want to stay in the euro, according to opinion polls. And they are using that fact to their advantage.
A statement from the office of Greece's interim prime minister said that Mrs Merkel had raised the subject during a telephone call with Greek President Karolos Papoulias.
The German chancellor "conveyed thoughts about a vote parallel to the election with the question to what extent do the Greek citizens wish to remain within the eurozone", said the statement.
"However, it is clear that the matter is beyond the competence of the caretaker government."
But Berlin denied such a proposal had been made.
"This is false and we completely dismiss this," a German government spokeswoman said.
Greece's caretaker government was sworn in this week after elections failed to produce a viable coalition to run the country. New elections have been scheduled for 17 June.
The result of the poll could determine the fate of austerity measures which Greece's international creditors are insisting on.
Investors fear any refusal by Athens to impose deep spending cuts agreed under a bailout deal could result in the country quitting the bloc of 17 countries that use the euro.
Larger countries such as Spain or Italy that are struggling to ease their debt loads might then become vulnerable, potentially triggering wider eurozone upheaval and even a global financial crisis to rival the one of 2008.
The situation is expected to top the agenda as the leaders of the US, Germany, France, Britain, Japan, Russia, Italy and Canada gather for the annual G8 summit, at Camp David near Washington DC.
Francois Hollande and Barack Obama have met for the first time at the White House
Iran's nuclear programme and Syria's crackdown on dissent are also expected to be addressed during the main talks on Saturday.
On Friday, President Obama welcomed the new French President, Francois Hollande, to the White House to discuss economic matters.
Mr Hollande, who took office this month, said he and Mr Obama "have the same conviction that Greece must remain in the eurozone".
Mr Obama said the situation was of great importance not only to Europe, but for the whole world.
The US president said he looked forward to "fruitful" discussions with other G8 leaders, with a strong focus on economic growth.
Mr Hollande also met British Prime Minister David Cameron at the British embassy in Washington.
Mr Cameron said that Greece must decide if it wanted to remain in the euro.
"We need decisive action from eurozone countries in terms of strengthening eurozone banks, in terms of a strong eurozone firewall and decisive action over Greece. That has to be done."
Meanwhile, there was another contradiction as European Union Trade Commissioner Karel De Gucht said the bloc's officials were working on contingency plans in case Greece left the eurozone.
He was contradicted by own his colleague, Economic Affairs Commissioner Olli Rehn, who said in a statement: "We are not working on the scenario of a Greek exit."
That however still does not rule out the possibility of contingency planning, says the BBC's Matthew Price in Brussels.
After the G8 summit ends on Saturday evening, most of the leaders will decamp to Chicago to join a larger group of international officials for a Nato summit on Sunday and Monday, at which Afghanistan is expected to be the main item on the agenda.
At 14:59:33 in BusinessThe US economy grew at an annual rate of 4.2% in the second quarter of the year, according to revised figures from the US Department of Commerce.
At 14:58:36 in WalesChepstow is to be the third Monmouthshire town to have street lights switched off in residential areas at night.
At 14:56:53 in ScotlandA man who "inflicted dreadful injuries" on a teenager has been jailed for 10 years for attempted murder.
At 14:54:07 in EnglandOne of the victims of church deacon Alan Morris has recalled how the "vicious beatings" he suffered became sexual abuse from which he never recovered.
At 14:48:09 in SportHartlepool United boss Colin Cooper says striker Luke James remains part of his plans.
At 14:42:29 in EnglandA man who threw a glass bottle while drunk, shattering a car windscreen and badly injuring a nine-year-old girl, has been jailed for eight months.
At 14:33:00 in ScotlandA care home in Aberdeen has been told it must make improvements after being labelled weak for the second consecutive time.
At 14:29:09 in Northern IrelandThe winter of 2013/14 was the stormiest in 143 years across Ireland and Britain, according to climatologists.
At 14:27:38 in EnglandA seaside town is bracing itself for a gold-rush after a German artist buried £10,000 worth of bullion on a beach as part of an arts festival.
At 14:24:10 in BusinessRussia has said it will introduce a new scrappage scheme to try to boost flagging car sales.
Harvard CitationBBC News, 2012. Eurozone dispute brews as G8 summit leaders gather [Online] (Updated 19th May 2012)
Available at: http://www.ukwirednews.com/news/1429596/Eurozone-dispute-brews-as-G8-summit-leaders-gather [Accessed 28th Aug 2014]
News In Other Categories
With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
A trial vaccine against Ebola could be given to healthy volunteers in the UK in September, according to an international health consortium.
Brad Pitt and Angelina Jolie are now married, according to a spokesman for the Hollywood couple.
The winter of 2013/14 was the stormiest in 143 years across Ireland and Britain, according to climatologists.
Hartlepool United boss Colin Cooper says striker Luke James remains part of his plans.
One of the victims of church deacon Alan Morris has recalled how the "vicious beatings" he suffered became sexual abuse from which he never recovered.