'Greeks Won't Get a Cent from Us' Say the Germans - 'Unless They Give Us Greek Islands'

As Greeks were rioting in the streets of Athens in early March, fighting the Greek riot police, German economy minister Rainer Bruerderle declared that Germany would offer not one cent of aid to the stricken Greek economy. His statement came a day after German suggestions that Greece could sell beautiful Greek islands to Germany. Greeks greeted the idea with outrage. For a population which suffered heavily during the German occupation of Greece in the second world war the idea of conceding land to Germany was repellent. The idea of Germany taking possession of Greek islands came just after a German publication accused the Greeks of being "cheats." Greek people responded by boycotting German products.

Greece's centre-left government had been ordered by Europe's leaders to save 16 billion euros in short order or face bankruptcy. Even if the Greek government enforces such large-scale austerity measures during 2010 it will still have a deficit of around 14 billion euros.

European leaders said the budget cuts were needed immediately to convince bond markets to loan money to the Greeks and also to win support from within the EU.

Mr Bruerderle's declaration dashed hopes in Greece that Greek prime minister George Papandreou and German chancellor Angela Merkel might agree on aid to bail out the Greek economy.

Jean-Claude Juncker, chairman of the Eurogroup finance ministers, said however that German taxpayers' money should not be necessary to rescue Greece. Although euro zone countries would guarantee the stability of the single currency if necessary, he said, Greece was making serious efforts at structural reform and would effectively slash public spending.

Greece would, however, have to "borrow and refinance with higher rates for a longer period of time,"

"The Greeks won't be left alone" he added. "There is a European solidarity with Greece - at least in the euro zone - a solidarity that can be activated if the financial markets were not to acknowledge that the Greek government is acting systematically."

Asked if this solidarity stretched to financial aid though, Mr Juncker replied: "No, we're not doing that...we're not giving the Greeks the impression that we will simply pass money across the table."

Hard to see then what the solidarity of the euro zone countries means in practice or what Germany means when it says the Greeks won't be left alone. The reality seems to be exactly that Greece will be left alone to sort out its problems but that European leaders nevertheless wish to hint to markets that they would step in at the last minute if necessary.