Why France supports Greece?

Article published on March 23, 2010
community published
Article published on March 23, 2010
It impresses how much support France is providing to Greece. France is supporting and clearly stresses out that the EU has to be promised of blunt economic assistance to Athens if needed. France is strongly opposed of a possible recourse of Greece to the International Monetary Fund.
France is trying with all its abilities to press Germany for agreeing to provide aid to Greece, but Chancellor Merkel appears strongly opposed, at least so far. There are undoubtedly at least two reasons for the economic conditions of French supporting Greece.

The first is that French banks are those that lent Greece more than any other bank in any other country - about 75 billion euros. Therefore French have every interest to help Greek economy to function smoothly in order to be able to meet its loan obligations. The second reason is that Paris wants to ensure that Athens would also be able to buy its six French frigates as agreed, so France has every interest to cultivate fair political relations with the Greek government. A look at the last day's French press is pretty enough to convince everyone that it would be very superficial such an analysis which would constrict the French attitude to the aforementioned reasons explained. There are many underlying causes that lead to a confrontation between Paris and Berlin.

The point is that the last 15 years while Germany retained segment of the euro area (from 25% in 1995 rose 27% in 2009), but the relative position strengthened greatly as the share of France declined considerably (from 18.5% to just 12.9%), and in Italy fell from 17% to 10%.

Building on the EU single market, which formed in its interests, Germany enriched with the money of its partners: the share of exports in total German GDP was 23.1% in 1994, but 2008 was thrown forward into 47.3 %! More than doubled, but fell to 40.8% in 2009 due to crisis in other countries.

Aspiring now in Berlin, which came out a winner compared to the crisis imposing strict conditions of financial discipline in all EU countries to an extend that not even required by the Maastricht and Lisbon terms, Germany is actually closer to consolidate hegemonic Position changes in the EU. As a result, the intra-European correlation changes in favour of Germany, therefore France is primary complaining as it will be the main loser because of this German attitude.