Merkel says Greece should never have been allowed to join Eurozone

The German chancellor has blamed her predecessor for allowing Greece to join the Eurozone in an election campaign speech given on Tuesday as she seeks a third term in office.

“Greece shouldn’t have been allowed into the Euro,” Ms Merkel told around 1,000 supporters of her Christian Democratic Union in Rendsburg.

“Chancellor Schroeder accepted Greece [in 2001] and weakened the Stability Pact, and both decisions were fundamentally wrong, and one of the starting points for our current troubles,” she added.

Merkel reiterated her desire for a strong Eurozone, but stressed that this could only be achieved by meaningful reforms in struggling countries such as Greece.

“I am expressly warning against a haircut,” she said. “It could create a domino effect of uncertainty in the Eurozone.”

A unified Euro area “is such a treasure, such a boon, that we can’t place it in doubt,” she told her supporters. “That’s why the Euro is more than a currency. For this reason we’ve shown solidarity, but solidarity always linked to responsibility for reforms in those countries that experience our solidarity,” she concluded.

Greece faces a financial black hole of up to €10bn (£8.6bn) and its finance minister, Yannis Stournaras, said that his country may have to renegotiate its bailout terms in a bid to ease its debt burden.

The issue is central to Ms Merkel’s re-election as she tries to solve the electorate’s discontent on the issue. Germany has been the largest contributor to Greece’s bailout, and German banks have the strongest exposure to Greek debt in the Eurozone.

Ms Merkel is a clear favourite to win a third term as voters approve of her management of the Eurozone crisis and her tough line with struggling states. Elections will take place on September 22^nd.

Ludovic Caritey