Merkel backs Greece, snubs more stimulus

German Chancellor Angela Merkel promised Tuesday to give "any possible support" to debt-crippled Greece while rebuffed callings that the eurozone need more stimulus packages to contain the escalating debt crisis. Addressing a conference of the German Federation of Industry (BDI), Merkel said that Germany respected Athens' efforts on austerity and structural reforms, and would continue to offer "any possible support" to curb the ongoing crisis and strengthen its recovery. She told the audience, including the visiting Greek Prime Minister George Papandreou, that her country is ready to defend the euro, a common currency of 17 European nations, as Germany has benefited a lot from the single currency, with which German commodities and services have an easier access to the eurozone states. However, the chancellor insisted that Europe is not facing "a euro crisis" related to the common currency, but it indeed has a debt crisis, caused by huge debt mountains in some eurozone member states. "We are in a difficult situation because the way-out of this debt crisis requires solidarity," she said. "So we will support any country that sets things right." Merkel stressed that the eurozone should combine the economic growth with "solid financial status", and the idea of raising more debt to maintain growth is "wrong." "We are not in favor of new stimulus programs," Merkel said, sending a clear response to countries, including the United States, that recently called on the eurozone to take new stimulus measures to get rid of the current crisis and restart the slow economy. U.S. President Barack Obama warned on Monday that Europe's failure to deal with the crisis is "scaring the world" and its actions for countering the financial troubles "haven't been quite as quick as they need to be." U.S. Treasury Secretary Timothy Geithner also urged Europe to "put a much more powerful financial framework" in wake of the deepening crisis. However, German politicians seemed cautious and reserved on such "big steps", fearing that it would lead to more breach of fiscal discipline and would transfer more debt burdens to countries in good financial situation, like Germany. On Monday, German Finance Minister Wolfgang Schaeuble said his country,the largest contributor in eurozone bailouts, has no intention of boosting the volume of current rescue fund for Greece, Ireland and other debt-laden eurozone countries, or the EFSF (European Financial Stability Facility). In his speech, Papandreou told German business leader that Greece has been taking "superhuman efforts" to cut its debts and considerable progress has been made in bettering the country's public finances. He stressed that Greece would meet every commitment it made related to financial reform and budget management. Papandreou's visit to Berlin came two days ahead for a crucial vote in German parliament on expanding the EFSF mechanism, which was agreed in principle by European leaders at a July summit and includes a second bailout package for Greece and enlarging the flexibility of 440-billion-euro (595-billion-dollar) rescue fund. As some lawmakers within Merkel's coalition openly objected the July deal, it is expected that Merkel has to rely on the opposition Social Democrats and Greens to pass the bill, which would be a new blow to Merkel's widely criticized leadership. Until now, only eight of the 17 eurozone states have ratified the new EFSF package.