(Photo: Britta Pedersen, AFP/Getty Images)
BERLIN — "Everyone lost," roared the headline of Germany's biggest tabloid, Bild, after European leaders reached a tentative deal on Greek debt Monday.
For Greeks, the deal entails deep new spending cuts, tax hikes and other harsh austerity measures. For Germans, the agreement means Europe's largest economy will send billions more in bailouts to a country that's regarded here as unproductive and beset by corruption.
A survey last week by online financial portal smava found that 65% of Germans had no confidence in Greece's promised reforms and did not want to send the country more aid.
At the same time, 78% of Germans also sympathized with Greeks suffering as their economy has shrunk in recent years while the country has labored under the onerous terms of previous bailout loans, according to an Emnid poll commissioned for Bild this month.
On the streets of Berlin, people echoed that split view.
"On the one hand, I think it's really good that there's a deal — a "Grexit" (exit from the euro) would have been too radical," said Nicole Görlitz, a non-profit fundraiser. "But on the other hand, I can also understand people who are upset that we have to pay so much."
Germany has contributed the largest share, around 27%, to the eurozone lenders' $88.2 billion bailout fund. The eurozone, the European Central Bank and the International Monetary Fund have given Greece $240 billion in bailouts since 2010.
Monday, after a marathon summit of leaders in Brussels, Greece accepted a deal that includes up to an additional $96 billion in bailouts in exchange for agreeing to enact rigorous reforms like sales tax increases, pension reductions and other budget cuts.
Greece must also allow European officials to monitor progress on those changes, giving Germany oversight over Greece's internal finances. In a controversial arrangement pushed by German Chancellor Angela Merkel, Athens also must set aside $56 billion worth of public assets – virtually Greece's entire net worth — as collateral to repay the debts if it cannot make its payments.
And leftist Greek Prime Minister Alexis Tsipras must drop his plans to rehire public workers and eliminate other austerity measures already in place — a platform that carried his Syriza party to victory in January.
The Greek, German and other European parliaments must now approve the deal.
It's not clear if Greek lawmakers will give it the green light by Wednesday, as required under the agreement.
Experts believed the deal would breeze through Germany's parliament, where Merkel's Christian Democratic Party holds sway. Merkel, keeping in mind the unpopularity of bailouts among her constituents, was unyielding during the negotiations in Brussels.
"The German parliament and the Christian Democratic Union will stand behind Merkel," said Carsten Brzeski, chief economist at ING's Frankfurt office. "There simply is no internal opposition to Merkel. If she tells them this is the deal we have, they will vote for it."
He said there is much skepticism and hesitation to be overly optimistic. "Keep the champagne bottles in the fridge, because it can still go wrong," Brzeski added.
That prospect displeases many Germans.
"Opening another bailout fund for Greece is wrong," said Reiner Holznagel, president of the German Association of Taxpayers. "They will never be able to fully settle this debt."
Holznagel said Greece should exit the 19-member eurozone.
"A Grexit together with humanitarian assistance from the EU would be necessary to stabilize the eurozone in the long term and would offer Greece a realistic perspective" for moving forward, he said.
Görlitz, the fundraiser, didn't think punishing Greece would be productive. Ultimately, kicking Greece out of the eurozone could undermine the euro and, therefore, harm Germany. Europeans needed to come to each other's aid, she said.
"It's a difficult situation but I'm glad we are helping," she added. "One day, we might need help, too."
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