Germany

Germany will be subsidising its weaker eurozone partners for a lifetime and Greece, Italy and Portugal face big changes if the European currency is to survive, Foreign Secretary William Hague said in an interview published on Wednesday, Reuters reported. Britain had been vindicated for its decision not to join the 17-nation currency club but was very concerned about the euro breaking up, Hague told the weekly Spectator magazine.

German Chancellor Angela Merkel may fall short of a majority in her own coalition for a crucial reform of the euro zone rescue fund meant to stop a sovereign debt crisis spreading, in what would be a severe blow to her authority, a test vote showed, Reuters reported. Talk of proposals to leverage up the 440 billion euro bailout fund to multiply Europe's financial firepower lifted global stocks on Tuesday but made it harder for Merkel to unite her fractious centre-right coalition.

As the crisis engulfing the 17-nation bloc escalates, Germany continues to press hard for Greece, the region’s worst fiscal miscreant, to pay a high price for breaking the rules, the Financial Times reported. From the federal president down, conservative thinkers have denounced the extraordinary steps taken by the European Central Bank to prevent financial meltdown. Jürgen Stark, one of their leading representatives, this month quit the ECB’s executive board in protest.

Germany’s bad banks, backed by the state to prevent the collapse of Hypo Real Estate Holding AG and WestLB AG during the credit crisis, would be the hardest hit in the event of a Greek default, leaving taxpayers to shoulder the bill a second time, Bloomberg reported. Hypo’s FMS Wertmanagement, with 8.76 billion euros ($12 billion) in Greek sovereign investments and loans, and WestLB’s Erste Abwicklungsanstalt, with 1.21 billion euros, bear more than half of German banks’ Greek debt, according to data compiled from company reports and statements.

Athens’s inability to get a grip on the debt problem is rattling markets and giving rise to talk of a notion that until recently has been considered taboo: a eurozone without Greece, The Christian Science Monitor reported. Greece's introduction last weekend of a new real estate tax and reduction in elected officials' pay are being called too little, too late to address its deep debt.

Germany’s ability to come to the rescue of troubled European partners won crucial backing from the country’s constitutional court on Wednesday, a victory for Chancellor Angela Merkel that also provided at least a temporary reprieve for markets that had begun to worry that Europe’s common currency could collapse, the International Herald Tribune reported. The ruling, which defied some expectations that the court would hamstring Mrs.

Back in May, Chancellor Angela Merkel, little-known for strident pronunciations on foreign policy, lashed out against the indebted countries of Southern Europe, the International Herald Tribune reported. As Greece sought its second rescue package, Mrs. Merkel used an appearance in Meschede, a small town in western Germany, to lambaste the Southern Europeans for not working hard enough, taking long vacations and retiring early. “It’s not just about getting further into debt in countries such as Greece, Spain and Portugal,” Mrs.

The head of Germany's powerful central bank called Thursday for greater co-ordination of fiscal policies in the eurozone as a response to the debt crisis, which he termed its "most severe ever test." Speaking in Hanover in northern Germany, Jens Weidmann said that any solution to the crisis that has crippled debt-laden states on the periphery of the 17-country zone must tackle the problem at its roots, Agence France-Presse reported.

German Chancellor Angela Merkel's cabinet approved new powers for the euro zone's bailout fund on Wednesday, but she faces an uphill battle to convince party skeptics to back efforts to contain the crisis. Concerned that Germany's parliament has little control over the European Financial Stability Facility (EFSF), some members of Merkel's center-right coalition are threatening to oppose boosting its powers when the Bundestag (lower house) votes on September 29.

German Chancellor Angela Merkel is weighing whether to yield to a demand by some lawmakers for a bigger voice in future debt bailouts as a condition to win her party's approval for a stronger euro-zone rescue fund, as a parliamentary vote on the issue was delayed a week, The Wall Street Journal reported. Granting the German parliament the right to approve or reject future bailouts could trigger similar demands from parliaments across the euro zone, whose lawmakers are closely observing Berlin's actions. That could lead to further delays in the EU's approval for the Greek rescue.