German Protestant leader says Greece needs growth plan to avoid collapse

German Protestant leader says Greece needs growth plan to avoid collapse

By Stephen Brown
2 Mar 2012

The leader of Germany's Protestants has warned that Greece faces economic collapse if current policies to cut Greek debt are not accompanied by a long-term debt relief and investment programme to boost growth.

The Rev Nikolaus Schneider, chairperson of the council of the Evangelical Church in Germany (EKD), noted that Greece has been grappling to achieve massive savings and to implement structural reform.

While these efforts are necessary in the medium term, such "impositions" should not be "only signal" of the EU towards Greece, Schneider said in a statement last month.

His intervention came as German and Greek political leaders were locked in a war of words over the terms of a proposed €130 billion rescue package for Greece.

Schneider said the unconditional and short-term need for savings was pushing Greece towards recession and that without readjustment this would lead to "economic collapse" and considerable social upheaval.

Alongside bridging support and the implementation of urgently needed structural reforms, the situation in Greece would be able to be brought under control only through a long-term debt relief programme and an investment programme bringing tangible benefits to the Greek population.

Schneider urged the consideration of a "Marshall Plan" - a reference to US economic aid to Europe after the Second World War - for the European crisis countries, and particularly Greece.

Other countries have already been already affected by a recession throughout the whole of the eurozone that has only just begun, he asserted.

Sticking firmly to the existing policy offers only a bleak outlook, said Schneider. "At the moment, it is not at all clear how Greece can return to growth and financial independence, since all the Greek economic indicators are moving in the opposite direction."

The EKD groups about 24 million Protestants from Germany's 82 million people.

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© Stephen Brown is a Geneva-based journalist. An Ekklesia associate, he is involved in the global ethics dialogue and has a wide background in ecumenical and current affairs reporting and analysis.

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