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Germany feels pressure to end crisis; Europe needs unity: Merkel

business Updated: Sep 17, 2012 21:01 IST

Uwe Albrecht has what he calls a wonderful problem. In his office in Leipzig's fortress-like town hall, the deputy mayor says the city's population has grown so much in the past decade that he is having to build more kindergartens and schools.

Leipzig is one of the success stories of the German reunification. New roads, rail links and a redeveloped airport have sucked in investment and international companies. But none of it would have happened without a colossal 20-year bailout that has already cost the west €1.3 trillion.

With Europe slumped in an existential crisis, looking both desperately and fearfully to Germany to supply the leadership and the money to match its clout as the EU's central power and biggest economy, it is often forgotten that Berlin is a past master at bailouts.

In a domestic debate that mirrors the resentments across the EU, richer German states now complain about constantly having to help out poorer states via the federal subsidies system.

Germany's position in Europe, according to historian Andreas Wirsching, was "a problematic in-between position: not dominant enough to impose its will on its European neighbours, but strong enough to be seen as a threat."

That might sum up Chancellor Angela Merkel's position. Indeed, she has said that Germany may be big and strong, but it is also over-stretched, and not big enough or strong enough to meet the expectations of rescuing the euro.

Meanwhile, Merkel on Monday said that Europe can only exert an influence on the world stage if it speaks with one voice. "We can only have a say in the world if we are united in the EU. And we can only have a say if we are economically successful," she said.

Merkel added that she wanted to keep Greece in the euro zone, but was not offering Athens any new concessions on reforms. "These reforms, some of them difficult, be carried through," she said.

The Guardian (with inputs from AFP)