Merkel tells irate Greeks painful reforms will pay off

ATHENS Tue Oct 9, 2012 9:19pm IST

Demonstrators, dressed as Nazis, wave a Greek and a swastika flag as they ride in an open-top car in Syntagma Square in Athens as they protest against the visit of Germany's Chancellor Angela Merkel, October 9, 2012. REUTERS/Yannis Behrakis

Demonstrators, dressed as Nazis, wave a Greek and a swastika flag as they ride in an open-top car in Syntagma Square in Athens as they protest against the visit of Germany's Chancellor Angela Merkel, October 9, 2012.

Credit: Reuters/Yannis Behrakis

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ATHENS (Reuters) - Tens of thousands of angry Greek protesters filled the streets of Athens on Tuesday to greet German Chancellor Angela Merkel, who offered sympathy but no promise of further aid on her first visit since the euro crisis erupted three years ago.

As police fired tear gas and stun grenades to halt angry crowds chanting anti-austerity slogans and waving swastika flags, Merkel's host, Prime Minister Antonis Samaras, welcomed her as a "friend".

Blamed by many Greeks for imposing draconian budget cuts in exchange for aid, Merkel reaffirmed Berlin's commitment to keep the debt-crippled Greek state inside Europe's single currency.

"I have come here today in full knowledge that the period Greece is living through right now is an extremely difficult one for the Greeks and many people are suffering," Merkel said during a joint news conference with Samaras just a few hundred yards from the mayhem on Syntagma Square, outside parliament.

"Precisely for that reason I want to say that much of the path is already behind us," she added, offering a public display of support to Samaras's three-month-old government on her first visit to Greece since 2007.

She tried to reassure her hosts that their reforms would eventually pay off, but also made clear that Greece, which has seen its unemployment rate surge to nearly 25 percent and economic output shrink by a fifth, would not solve its problems overnight.

Samaras promised to implement economic reforms necessary to restore confidence: "The Greek people are bleeding but are determined to stay in the euro," he said.

On the other side of the parliament building, tens of thousands of demonstrators defied a ban and gathered to voice their displeasure with the German leader, whom many blame for forcing painful cuts on Greece in exchange for two EU-IMF bailout packages worth over 200 billion euros.

Greek police fired teargas and stun grenades when protesters tried to break through a barrier to reach the cordoned-off area where Merkel and Samaras were meeting. Some demonstrators pelted police with rocks, bottles and sticks.

Four people dressed in World War Two-era German military uniforms and riding on a small jeep, waved black-white-and-red swastika flags and stuck their hands out in the Hitler salute.

Banners read "Merkel out, Greece is not your colony" and "This is not a European Union, it's slavery".

Some 6,000 police officers were deployed, including anti-terrorist units and rooftop snipers, to provide security during the six-hour visit. German sites in the Greek capital, including the embassy and Goethe Institute, were under special protection.

"URGENTLY NEEDED"

After steering clear of Greece for the past five years, Merkel decided to visit now for several reasons.

She was keen to show support for Samaras, a fellow conservative, as he struggles to impose more cuts on a society fraying at the edges after five years of recession.

With a year to go until Germany holds a parliamentary election, Merkel also hoped to neutralise opposition criticism at home that she has neglected Greece and contributed to its woes by insisting on crushing budget cuts.

After her government flirted earlier this year with the idea of allowing Greece to exit the euro zone, she now appears determined to keep it in - at least until the German election is out of the way.

Greece is in talks with its "troika" of lenders - the European Union, European Central Bank and International Monetary Fund - on the next tranche of a 130-billion-euro loan package, its second bailout since 2010.

Without the 31.5-billion-euro tranche, Greece says it will run out of money by the end of November.

Merkel said the aid payment was "urgently needed" but stopped short of promising that the funds would flow.

"The troika report will come when it is ready. Being thorough is more important than being quick," Merkel said.

"We are working hard on this, but we must resolve all the problems," she added. "I think we'll see light at the end of the tunnel."

Ties between Germany and Greece run deep. Thousands of Greeks came to Germany after World War Two as "guest workers" to help rebuild the shattered country and more than 300,000 Greeks currently reside there.

But the relationship is clouded by atrocities Greeks suffered at the hands of the Nazis. Samaras's own great grandmother killed herself after she watched Nazi tanks rolling down the streets of Athens and the swastika flying over the Acropolis.

Greek President Karolos Papoulias, whom Merkel also met on Tuesday, fought against the Germans as a teenager, before fleeing to escape persecution by the Greek military dictatorship and finding refuge in Germany.

The crisis has revived long-dormant animosities, with Greek protesters burning effigies of Merkel in Nazi gear and German media playing up images of lazy Greeks keen for German cash.

Relations hit a post-war low early this year when Merkel's finance minister, Wolfgang Schaeuble, likened Athens to a "bottomless pit" and proposed imposing a European "Sparkommissar" on Greece to control its finances.

"The average German voter is irritated at the thought of dispatching more taxes or savings to feckless southerners, yet is desperate for the respect and goodwill to Germany that comes from public displays of magnanimity," said David Marsh, chairman of think tank OMFIF.

"When Merkel flies to Athens, she's showing she's in charge, and she cares."

(Additional reporting by Tatiana Fragou, Lila Chotzoglou, Renee Maltezou, Daphne Papadopoulou and Dina Kyriakidou in Athens and Tom Kaeckenhoff in Bonn; Writing by Noah Barkin and Matt Robinson)

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