Merkel belatedly leading in eurozone crisis: Schroeder

Chancellor Angela Merkel has belatedly demonstrated leadership in the eurozone debt crisis and it was the right thing to do, even though she faces resistance in her party and from the public, ex-chancellor Gerhard Schroeder said. In an interview with Reuters, Schroeder also defended his government's controversial decision to break the European Union Stability Pact rules in 2003/2004 on the ground that his economic reforms caused short-term pain but long-term gains for all of Europe.
"The chancellor has belatedly taken on European responsibility," said Schroeder, who was chancellor of a centre-left coalition from 1998 to 2005 and is now a business executive in his home town of Hanover. "And she's now running the risk of hitting resistance from her party and voters," added Schroeder, who is also seen as an elder statesman in his Social Democrats (SPD) party. "But it's the right thing to do, to risk losing your office to fight for important convictions."
He praised Greek Prime Minister George Papandreou for doing exactly that. Schroeder himself lost the support of the left wing of his party and then the electorate by pushing through economic reforms, known as "Agenda 2010", that cut unemployment and spurred growth by trimming back on a generous welfare system.
Merkel has faced widespread criticism in Europe and Germany for dithering in the early stages of Europe's sovereign debt crisis, exacerbating the problems. But in recent months she has taken a bolder stance, putting her centre-right coalition of Christian Democrats (CDU/CSU) and Free Democrats (FDP) at risk in order to push through eurozone rescue measures.
In a rare interview, Schroeder also criticised Merkel's government for repeatedly changing its position. He ridiculed the way coalition leaders often insist that some action is "taboo" before agreeing to it weeks later. "Whenever anyone in this German government speaks about a 'taboo', then we all know a few weeks later that won't be a taboo any more," Schroeder said, saying this was partly why the German public had grown wary of EU rescue efforts for Greece.
"This is a development that's not good for Europe," he added. "That's something they should keep in mind." Schroeder, 67, acknowledged that Greece might not have been admitted to the eurozone had EU leaders been aware of the depth of its fiscal problems. Asked if it had been a mistake to admit Greece, he said:
"If one had had complete clarity about the economic situation back then, the decision (on Greece) might have been different," said Schroeder. "But at the time there was a general consensus, the EU Commission recommended admission. Those who now criticise our SPD-Greens government for that are forgetting that the CDU and FDP in the European parliament also voted for Greece."
Schroeder said the "main mistake" made over Greece in the euro zone debt crisis was that not enough was done to help the country get back on its feet once the full extent of its fiscal woes became clear. "It's no surprise that Greek Prime Minister (George) Papandreou hardly had a chance to push through what was being demanded from him," Schroeder said. "The conservatives across Europe did very little to convince the conservative opposition (in Greece) to stop acting so irresponsibly."
Schroeder also urged his party to move sooner rather than later to pick a candidate to run against Merkel in the next election. There are three possible SPD candidates but party leaders want to wait until late 2012 to make their choice. "I agree with those who would argue for a quick decision," Schroeder said, dismissing the argument that picking a candidate too soon could damage their chances.
"We've got three good candidates." SPD chairman Sigmar Gabriel, parliamentary floor leader Frank-Walter Steinmeier and former finance minister Peer Steinbrueck are the three candidates. Former SPD chancellor Helmut Schmidt has urged the party to pick Steinbrueck. Schroeder offered no opinion, but in the last election in 2009 he was a strong advocate of Steinmeier, who was beaten by Merkel.