Germans not in a giving mood when it comes to Greece

Reporting from Berlin — 

He has as much compassion as anyone, but when it comes to digging into his own wallet to help, says Karl Heinz Prehm, there are those who deserve it, and those who don’t.

“When someone’s in trouble without it being their own fault, then of course you help. Just look at Haiti; Germany’s spending millions in aid,” said Prehm, who owns a small computer services firm.

Then he turned to a struggling country much closer to home, but one that registers zero on his sympathy meter.

“It’s Greece’s own fault that it’s in financial trouble now. They lived above their means,” said Prehm, who is adamant that not one cent of his hard-earned tax money should go to help debt-ridden Athens pay its bills.

Such feelings resonate up and down Germany, Europe’s economic powerhouse, and have put the government here in an ugly bind as it contemplates how to respond to the most serious crisis to face the continent’s common currency, the euro, since it was introduced 11 years ago.

Can Berlin afford to sit by as investor confidence in the euro nose-dives, even if the fall is due to the reckless spending habits of other countries? If not, can the government of Europe’s most populous and richest country risk voter wrath at home by leading a bailout of those nations, which include not just Greece but potentially Spain and Portugal?

It’s not yet clear which course of action Berlin will take. Germany has merely joined other European Union members in pledging support -- but no cold cash -- for Greece in its efforts to slash a colossal budget deficit that has roiled international markets.

This week, the EU warned that it would demand more austerity measures from Athens if no discernible progress on cleaning up its finances was made within a month. Finance ministers also repeated a pledge to shore up the euro if necessary, but declined to specify how.

What’s not in doubt, however, is the sense of outrage building in this country, where polls show that a majority of people blame Greece for cooked books and other financial skulduggery, and resent the idea that Germany should somehow be on the hook for it.

It’s an anger peppered with a rueful sense of I-told-you-so and more than a hint of moralism. This is a land whose people proudly clung to their own robust currency, the deutsche mark, but reluctantly followed their leaders in adopting the euro on the argument that greater economic integration with their neighbors would be in their long-term interests.

That theory looks a bit more threadbare now. And Germans, a people famous for their economic discipline -- some say parsimony -- are left to wonder what kind of message would be broadcast if they rescued Greece.

“If one country after another comes and asks for money, the whole system would collapse,” declared Jutta Finke, a 69-year-old retiree.

Athens shocked the world in October when it announced a budget deficit of 12.7% of gross domestic product. Panicked investors began dumping the euro, afraid that Greece would be unable to pay its debts.

The deficit far exceeds the 3% allowed for countries that use the euro. Germany had pushed for such a provision, precisely because it was worried that a crisis like this might erupt and jeopardize the stability of the common currency. But no strong enforcement mechanisms were built in, an oversight that’s now coming back to haunt the 16-nation Eurozone.

For many here, the euro’s predicament has confirmed long-held views of southern Europe as an unreliable partner, a region whose go-with-the-flow mentality and seemingly malleable approach to rules sit poorly with pursed-lipped German rectitude. Fine for vacationing (and nude sunbathing) on blissful white-sand beaches; not so great for doing business, from the German point of view.

“We always knew that countries like Spain, Portugal and Italy wouldn’t play by the rules,” said Andreas Falke, a professor of international studies in Nuremberg.

“You could argue that it makes sense to kick Greece out [of the Eurozone] and send a lesson to the other countries,” he said with a tinge of regret. “But it’s never going to happen.”

Such a drastic step would be a humiliating setback for the EU and its mantra of ever-greater unity. But plenty of Germans are willing to take that chance. A recent poll in the newspaper Bild showed that 53% of respondents want Greece ejected.

Germans acknowledge the dangers of not acting to support the euro somehow (although a decline in the currency’s value is not wholly bad news for the world’s second-largest exporter). But many here are disgusted by what they see as a consistent record of lying and cheating out of Athens.

Greece has been rebuked before by the EU for putting out fishy statistics. In fact, it was widely suspected of playing fast and loose with the numbers to enable it to adopt the euro in 2001.

German news reports saying the Greek government secretly used exotic financial instruments, with Wall Street’s help, to fund its spendthrift ways over the years have only led to more head shaking here.

In flush times, the gap between official Greek statistics and reality could be papered over.

But these aren’t flush times. Nor is Germany the deep-pockets nation that others think it is and therefore expect an easy handout, many here say.

Indeed, what makes a possible bailout of Athens even more distasteful is that Germany has undergone some difficult retrenchment to maintain fiscal discipline and abide by the rules. The center-right government’s labor reforms and cuts in unemployment and welfare benefits have angered many, and the idea that Germans might now have to subsidize the pension of some Greek civil servant goes down like a swig of hot beer.

“Greek bureaucracy has become fat and lazy,” said Michael Dammer, 37, a software developer who, like many here, didn’t want the euro in the first place. “It shouldn’t be fed by the German taxpayer’s money.”

Athens has said it does not need the charity of other EU nations to balance its books; it has unveiled an ambitious austerity plan that could encounter heavy resistance in a country known for social unrest.

But Greek officials say they would welcome other forms of support and efforts by fellow Eurozone governments to stabilize the situation. Analysts say loan guarantees would be one lower-impact way of helping.

That would be an acceptable compromise to Prehm, the computer-services company owner, as long as such assistance came attached with conditions for Greece to stay on the straight and narrow. Otherwise, he said, you might as well be handing over money to an addict.

Prehm, 59, is eager to dispel any notion of deep-seated prejudice.

“Ancient Greece is very important for us Europeans. Greece gave us democracy, culture and science,” he said.

But the time has come for tough love, not cheap grace.

“I don’t want to give an impression that we Germans are heartless. If it’s not the country’s own fault, whether the government or individuals, we’re always ready to help right away,” Prehm said.

“But if we’re being cheated, we can be really mean.”

henry.chu@latimes.com

Special correspondent Stephanie Kirchner contributed to this report.