Germany to Greece: Stick to the Plan

Germany's finance minister and other senior officials urged Greece on Wednesday to stick to the aid plan agreed with the euro zone and IMF and to avoid the dangerous instability posed by the prospect of a referendum on the latest bailout deal.

"It would be helpful if clarity is achieved as soon as possible on which path Greece wants to take," Finance Minister Wolfgang Schaeuble told the Hamburger Abendblatt newspaper.

After EU leaders agreed last week on measures to help Greece and stabilize the 17-member currency union, Greek Prime Minister George Papandreou stunned his euro zone partners and shook financial markets by calling a referendum on the planned 130 billion euro bailout package.

Chancellor Angela Merkel and French President Nicolas Sarkozy have summoned Papandreou to crisis talks in Cannes on Wednesday before a summit of G20 world economies.

German European Commissioner Guenther Oettinger said Papandreou's actions had "made the situation considerably worse for countries which don't have the highest credit rating, and the danger of further setbacks is rising."

He told the daily Die Welt that the Greek leader should have given European leaders advance warning of his referendum plans at their twin summits last week. The mass-circulation Bild daily said "even the chancellor was taken by surprise."

CRISIS WEIGHS ON MERKEL

"My worry is that we will have an unstable situation until the referendum. The Greeks have many good grounds to vote for the package. The steps we decided on are a good opportunity for their country. But there's a lot of frustration and resignation in Greece. If the Greeks actually vote no, the consequences are unforeseeable," said Oettinger, the EU energy commissioner.

Underlining the political toll the crisis is already taking on Merkel, an opinion poll done for the magazine Stern suggested her much-criticized handling of it was eroding voter support for her widely expected bid for a third term in 2013.

Half of those polled did not want the conservative leader re-elected while 39 percent were in favor. Asked their view of Merkel's management of the euro crisis, 46 percent said she had not reacted well, while 42 percent voiced their approval.

Her close partner in crisis summits, France's Sarkozy, fared worse with the German public. A quarter of Germans hoped he would win another term as president in April while 44 percent would like to see someone else govern France.

With both of them expected to put pressure on Greece at the pre-G20 meeting, Schaeuble told the Hamburg daily he "assumed Greece is aware of its responsibility and will go along with the measures that were agreed together and unanimously."

But Manfred Weber, the German vice-chairman of the center-right bloc in the European Parliament, warned that Athens was "playing with fire. If the Greeks vote no, there will be no alternative but a sovereign default."

The head of Germany's banking association, Michael Kemmer, said that while there should be widespread approval for a write-down on Greek sovereign debt among private creditors, this would not be feasible before a Greek referendum on the bailout deal.

"I can't imagine a debt exchange taking place before the referendum," he told reporters, adding that preparations could continue but no final steps should be taken before the vote.