- The Washington Times - Wednesday, May 15, 2013

A top Greek official on Wednesday warned of a “widening gap” in the eurozone that separates financially stable countries such as Germany from their southern European partners that are struggling to keep up.

Evangelos Venizelos, Greece’s president of the co-governing Pan-Hellenic Socialist Movement, condemned the “vicious cycle of inequality” against southern members such as Italy, Spain and his own country that he said has come to dominate European policymaking. Ahead of a speech that Mr. Venizelos will deliver Thursday at the Woodrow Wilson Center in Washington, he said these countries are not treated with the same respect as the rest of their more-wealthy European partners.

“We’re trying to escape the perception of being a ‘prodigal country,’” Mr. Venizelos said Wednesday afternoon.

Mr. Venizelos warned that these tensions could weaken the European Union by fueling popular skepticism and encouraging economic nationalism, rather than integration among the members’ economies.

This comes as the eurozone announced Wednesday that the 17-nation bloc’s economies shrank by 0.2 percent for the first quarter of 2013, the sixth consecutive quarter of decline. Germany, which makes up about 30 percent of the eurozone economy, grew by 0.1 percent in the quarter, but it wasn’t enough to offset the rest of the region, including the suddenly listing French economy.

Greece was one of the worst-hit countries in the eurozone with its economy shrinking 5.3 percent in the quarter.

A recent poll from Pew Research Center shows that 72 percent of Greeks believe the economy is very bad, while only 1 percent say it is good. They blame a lack of jobs, high public debt and rising prices for the country’s economic problems.

“There is without a doubt strong economic nationalism,” Mr. Venizelos said.

France suffered a decline of 0.2 percent. The economies in Italy and Spain both contracted by 0.5 percent.

“It is obvious that there is a lot of nervousness in many big countries, because when you have strong political, economic and social nervousness in France, the second country in the eurozone, in Italy and in Spain, of course you have a nervous eurozone,” Mr. Venizelos said.

“Thus, something much more is needed for the south and for a Europe that is overcoming the crisis.”

This division among eurozone members also has led to unfair conditions in Greece, he said, pointing to higher interest rates for borrowers there than in Germany as one example.

Mr. Venizelos would like to see Germany ease off on demands for spending cuts that he said have contributed to Greece’s record-high unemployment rate above 25 percent. Though he acknowledged that austerity was once a difficult-yet-necessary measure for Greece, he said it is currently an “ideological problem” that is holding the country back from growing.

“But it’s very difficult for a country under crisis, under such a big loan, to fight for this idea,” he said. “On a European level, it is very difficult for us to exercise that kind of influence in Germany.”

The Pew survey found that 56 percent of Greeks oppose austerity, even as 59 percent of Europeans overall still believe the best way to solve the bloc’s problems is by reducing the debt.

With the German elections coming up in September, Mr. Venizelos said it would be easier to work with fellow Social Democrats in Germany, who would be more willing to ease off on austerity measures. Polls show that current center-right Chancellor Angela Merkel is a strong favorite to be re-elected, but Mr. Venizelos said he backs Peer Steinbruck, the challenger from the Social Democratic Party.

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