Skip to main content

Merkel urges Greece to resolve political instability

By the CNN Wire Staff
updated 4:09 PM EDT, Fri May 18, 2012
German Chancellor Angela Merkel called Greek President Karolos Papoulias on Friday morning.
German Chancellor Angela Merkel called Greek President Karolos Papoulias on Friday morning.
STORY HIGHLIGHTS
  • NEW: Greece says Merkel has raised the possibility of a referendum on the eurozone
  • NEW: Merkel's government denies the statement
  • Greece is holding fresh elections next month after a first vote failed to produce a government
  • Ratings agency Fitch has cut Greece's credit rating amid concerns about its future

(CNN) -- The Greek government said Friday that in a phone conversation with the country's president, German Chancellor Angela Merkel suggested that the issue of whether his country remains in the eurozone be put to a referendum, a claim Germany flatly denied.

Merkel made the call to President Karolos Papoulias, whose country is facing uncertainty over its government, ahead of her visit to the United States for the G8 summit of international leaders.

According to the Greek prime minister's office, Merkel "conveyed ... thoughts about holding a referendum in parallel with the elections with the question how much do Greek citizens want to remain in the eurozone."

When asked about the statement, a spokeswoman for the German government said, "This is not true." The spokeswoman declined to elaborate further.

The Greek government stood by its statement about the phone call and declined to comment further. Papoulias' office also declined to comment except to confirm that the phone call took place.

A temporary Greek government took office Thursday as the country wrestles with a political crisis that sprang from its inability to pay its debts.

Greece is heading toward new elections next month, with polls suggesting a narrow victory for a radical leftist party that wants to tear up an international loan agreement that forced the government to make deep budget cuts.

London a safe haven for eurozone money
The Greek left-wing and the eurozone
Greek eurozone departure a done deal?
Eurozone: What would a Greek exit mean?

That possibility has sent ripples of fear through markets in Europe, Asia and the United States as analysts worry that it could ultimately lead to the collapse of the euro currency used by 17 European nations.

Ratings agency Fitch cut Greece's long-term credit rating from B- to CCC on Thursday, reflecting worries about its ability to remain in the eurozone.

"The downgrade of Greece's sovereign ratings reflects the heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union," Fitch said.

"In the event that the new general elections scheduled for 17 June fail to produce a government with a mandate to continue with the EU-IMF programme of fiscal austerity and structural reform, an exit of Greece from EMU would be probable."

Antonis Samaras, the leader of Greece's New Democracy party, slammed the possibility of a referendum.

"The Greek people do not need a referendum to prove their choice of the euro, a choice that it defends with bloody sacrifices," Samaras said. "Merkel's proposal tonight about a referendum -- and at a pre-election time -- is, at the very least, unfortunate and cannot be accepted."

Samaras' party narrowly came in first in this month's elections, but opinion polls since then have suggested that Syriza would finish in first place in a new election.

Alexis Tsipras, the leader of the Syriza party who leads in polls ahead of the June 17 election, said Friday that with the vote, "The Greek people will hold a final answer. ... This will put an end to the austerity bailouts, submission and lack of dignity and will pave the way to progressive developments for the entire of Europe."

Greek voters punished the major parties at the polls May 6 for the harsh budget cuts imposed by the country's international lenders, the European Union, European Central Bank and International Monetary Fund.

The election left no party able to form a government, creating deep uncertainty about Greece's ability to continue to meet the terms of its bailout package and therefore its debt obligations.

In her call with Papoulias on Friday, "(Merkel) reiterated the German position that Europe is waiting for the elections and that it is the wish of all European partners and also of Germany that a government is formed as quickly as possible after the elections," a German government spokeswoman said.

Merkel said Wednesday that she is working to keep Greece in the eurozone.

"Europe needs to show solidarity and help, particularly with growth, unemployment and development," she said.

Merkel, a champion of forcing governments to balance their budgets in order to promote stable economic growth in Europe, said she regrets the suffering of the Greek people in the face of tough budget cuts.

"It's very bitter, obviously," she said of the austerity measures that have left some Greeks struggling to pay for food or utilities.

But, she said, "Sacrifices had to be made. ... I think these are necessary measures that had to be taken."

CNN's Laura Perez Maestro and journalist Elinda Labropoulou contributed to this report.

ADVERTISEMENT
Part of complete coverage on
Marketplace Europe
updated 11:31 AM EST, Thu January 16, 2014
Marketplace Europe visits Latvia to see how the Baltic country has made its transition to the Euro from the Lat.
updated 11:30 AM EST, Thu January 16, 2014
CNN's Nina Dos Santos visits Latvia to speak to the country's outgoing Prime Minister and the prospects for the eurozone's 18th member.
updated 11:40 AM EST, Thu January 2, 2014
Malta is the gateway to Europe and on the frontline of the immigration flows. Isa Soares reports from a detention center on the Mediterranean island.
updated 11:41 AM EST, Thu January 2, 2014
CNN's Isa Soares speaks with people on the streets of Valletta who say their country can't cope with more migrants from Africa and the Middle East.
updated 5:06 AM EST, Thu January 9, 2014
Malta cannot afford to continue supporting migrants from war-torn countries in its over-crowded detention camps, the country's foreign minister has told CNN.
updated 4:23 PM EST, Thu December 26, 2013
Slow recoveries, bailouts, and youth unemployment. Richard Quest speaks to Europe's top CEOs about the issues of 2013.
updated 4:14 PM EST, Thu December 26, 2013
CNN's Richard Quest speaks to economist Bob Parker about defining moments of 2013 and about what to expect in 2014.
updated 1:15 PM EST, Thu December 5, 2013
Estonia is setting the pace for other European nations with a thriving economy and its tech industry, according to the Baltic nation's leader.
updated 2:03 PM EST, Thu December 5, 2013
The Baltic nation of Estonia is developing its oil shale energy reserves in a bid to become energy self-sufficient.
updated 4:25 AM EST, Fri November 29, 2013
Europe must stop being nationalistic if it wants to help a lost generation of workers, the regional boss of U.S. conglomerate General Electric says.
updated 12:06 PM EST, Thu November 14, 2013
Peer at the windows and you'll spot big colorful chairs, plastic plants and a huge bed, but this is no department store.
updated 5:06 AM EST, Tue November 19, 2013
There once was a time, many years ago, when the sounds of bagpipes struck fear into the stomachs of Englishmen.
updated 6:16 AM EST, Mon November 11, 2013
Greece is on the way to economic recovery as investor faith returns to the recession-ridden eurozone nation, an executive at Greece's largest bank has told CNN.
updated 7:00 AM EST, Fri November 8, 2013
Could Greece's famous spice help the country's farmers through a four-year long economic crisis.
updated 9:07 AM EDT, Fri November 1, 2013
One of the masterminds behind the euro says Europe would have suffered a far worse fate if the single currency had never been created.
updated 1:41 PM EDT, Thu October 31, 2013
Nina Dos Santos visits the Dutch city where the European treaty carrying the city's name came into force 20 years ago.
updated 11:10 AM EDT, Fri October 25, 2013
As Spain continues its drive to slash budgets and cut spending, one of the nation's favorite pastimes is under threat as ministers look for ways to boost productivity.
updated 12:17 PM EDT, Thu October 24, 2013
The high commissioner of Brand Spain talks about getting the country back on its fee and attracting business.
ADVERTISEMENT