BERLIN/BRUSSELS (Reuters) – Some politicians in Europe air the view that an “orderly” Greek debt default should be discussed, but history suggests it would be a very messy affair unless euro zone leaders agree to make preparations and ring-fence the banks.

Commentators who favor a default for Greece, believing other options just delay the inevitable, often cite Argentina’s default in 2002 — and subsequent strong economic growth — as an argument that it need not be too painful.

“If Europe is taking us as an example, they must be in even more trouble than I thought,” observed economist Aldo Abram in Buenos Aires. He recalled that the president who declared the biggest sovereign debt default in history, Adolfo Rodriguez Saa, lasted a week and was one of four presidents in a month.

If Greece follows Argentina’s desperate path of devaluation and abrupt debt default, said Abram, “they will be condemned to poverty and will see their banking system destroyed.”

European leaders are adamant that Greece will not default, let alone leave the euro zone, and want parliaments to ratify a second bailout package for the debt-laden country which has so far failed to deliver on reforms set as a condition for aid.

A souped-up European Financial Stability Facility (EFSF) with the involvement of private-sector creditors and the more permanent European Stability Mechanism (ESM) taking its place from mid-2013 are meant to fend off any need for restructuring.

But with Greece failing to meet the European Union and International Monetary Fund’s terms for bailout, German Economy Minister Philipp Roesler has suggested lifting a “taboo” on talking about an “orderly bankruptcy.”

STRALSUND, Germany, Aug 29 (Reuters) – One in five people are on social welfare, 14 percent of teenagers drop out of school with no qualifications and unemployment is all but a certainty for many.

In Gruenhufe, part of Chancellor Angela Merkel’s constituency in the northeast German state of Mecklenburg-Vorpommern, the shrill slogans of the far right stir more emotion than anything as remote as debate over the euro crisis.

Almost every street lamp bears posters of the National Democratic Party (NPD) in black and red, with slogans such as “Criminal foreigners out!”

“Who asks the people what we want? Nobody. They just do whatever will get them reelected,” Thomas Wenk, a 54-year-old former shipyard worker, said in a housing estate in Gruenhufe.

“The other parties play into the NPD’s hands by doing nothing for young people. The NPD takes the vacuum left by unemployment and low pay and fills it with slogans.”

With nearly 12 percent unemployment — three times the level of the wealthy south — and young people leaving the region to find work, Mecklenburg-Vorpommern is fertile ground for the far right, like several other former East German states.

In the historic town centre of Stralsund, the district that Merkel represents in the German parliament which includes Gruenhufe, colourful gabled houses nestle under towering red-brick gothic churches in the bustling Baltic port.

BERLIN/TAMPERE, Aug 23 (Reuters) – A minister in Angela Merkel’s conservative party propelled Germany into a euro zone debate about guarantees for Greek aid, backing a demand for collateral by Finland, which said it could quit the bailout programme if its request was turned down.

With Finnish Prime Minister Jyri Katainen telling Reuters his country could pull out of the Greek rescue scheme if guarantees are not put up, Germany’s labour minister proposed using gold reserves and state industry stakes as security for aid.

“Several states are making big efforts to service their debt. This must be honoured. But to keep up those efforts in the long term, collateral is needed,” Ursula von der Leyen, who is also a deputy leader of the German chancellor’s Christian Democrats (CDU), said on television on Tuesday.

German officials said her comments were not the government’s position and that the key issue was to link aid under the euro zone rescue fund, the European Financial Stability Facility (EFSF), to “strict conditions” regarding fiscal reforms.

“Von der Leyen is expressing a personal opinion and doesn’t have authority as a minister on this issue,” said one official.

Greece agreed last week to provide cash collateral for AAA-rated Finland’s loans in a bilateral deal that sparked requests for similar treatment from Austria, the Netherlands and Slovakia. This prompted rating agency Moody’s to warn that Greece’s bailout payments could be delayed.

Similarly, the Institute of International Finance – the banking lobby helping to coordinate private sector involvement in the Greek rescue scheme – warned on Tuesday that more demands for collateral could hold up the approval process.

BERLIN (Reuters) – A minister in Angela Merkel’s conservative party propelled Germany into a debate about guarantees on bailout payments to Greece, backing a demand from Finland for collateral, but Berlin distanced itself from her comments.

Labour Minister Ursula von der Leyen, also a deputy president of the chancellor’s Christian Democrats (CDU), told German TV on Tuesday that future bailouts should only be made against guarantees.

“Several states are making big efforts to service their debt. This must be honored. But to keep up those efforts in the long term, collateral is needed,” the minister was quoted as saying by public broadcaster ARD.

One official responded by saying her comments were not the German government’s position and that the most important thing was to link aid under the European Financial Stability Facility to “strict conditions” regarding fiscal reforms.

Greece agreed last week to provide AAA-rated Finland with cash collateral for the loans in a plan that sparked requests for similar treatment from Austria, the Netherlands and Slovakia.

Until von der Leyen spoke, German government officials had only made off-the-record comments about Finland’s requirement for Greece to put up collateral, saying they worried this could spark just such copy-cat requests from other countries.

Austria has been an outspoken critic of the bilateral deal and said on Tuesday it was one of “many” euro zone countries with concerns about unfair treatment.

BERLIN (Reuters) – German politicians urged tough action Thursday against a surge in arson attacks on cars in Berlin, blamed by some on the far right or far left, but by the police on common criminals.

Nightly car-burnings have been going on for years in the otherwise relatively safe German capital but the number has recently surged, reaching 47 in the past three nights alone.

Mayor Klaus Wowereit said the attacks had once been politically motivated, targeting luxury cars in neighborhoods such as Friedrichshain and Kreuzberg where there are active youth scenes linked to anarchists and the far left.

“But the latest incidents are different. The fires are being lit across the area,” he said.

German media have speculated the arsonists might be from the far right or left, or possibly just youths out for a thrill, raising concern that Germany might suffer violence similar to the riots seen in London and other British cities this month.

But Wowereit, who is seeking re-election in September, said the burnings had “nothing to do with” the British riots.

Already more than 130 cars have been engulfed in flames this year, similar to the annual totals since the phenomenon appeared in 2007. But Berlin police are at a loss to profile the arsonists or explain their motives.

BERLIN (Reuters) – Protests outside the palace, IMF warnings to cut spending, people in suits avoiding the mob, fear of a run on the banks, the spectre of default, a currency fixed to a much stronger economy: Greece, 2011, or Argentina, 2001?

“Que se vayan todos!” (They must all go!) was the slogan of the protesters forcing out the Argentine president who locked away their bank savings, triggering default and devaluation. “Thieves!” and “Leave us alone” Greeks yelled.

The parallels between the Greek crisis and Argentina’s collapse 10 years ago were not lost on Athens protesters last month when parliament voted through more cuts. They floated a balloon asking: “Yesterday, Argentina; Today, Greece; Tomorrow?”

That vote cleared the way for a second EU/IMF bailout for Greece that has pacified financial markets for the time being. But opinion is divided over what the future holds and whether Greece should be daunted or encouraged by Argentina’s example.

Some economists argue that Argentina’s default and exit from the peso’s one-to-one peg to the dollar — the “Convertibility” system lasting a decade — set the scene for sustained economic growth that reached 9.2 percent last year.

Others argue that because Argentina’s crisis was preceded by a decade of free-market reforms, and followed by a huge surge in world commodity prices benefiting its farm exports, it would be unwise for Greece to attempt to take the same fraught path.

Argentines watching from afar often say it is “just like 2001 but, unlike Greece, we were on our own.” This underlines the gap in their strategic significance: dollarised Argentina held no risk of contagion for the United States, but an uncontrolled crisis in Greece could spread to Spain and Italy.

BERLIN (Reuters) – Angela Merkel lifted a weight from Europe’s shoulders by agreeing to a new Greek bailout, but Germans may feel her apparent victory in making bank contribute is outweighed by having ceded more power to Brussels.

The German chancellor had sparked a euro sell-off two days before Thursday’s crisis summit by warning the outcome would not be “spectacular” — the kind of prudence that has given her a reputation for dragging her feet on Europe’s debt woes.

In the event, her pre-summit huddle with France’s Nicolas Sarkozy and the head of the European Central Bank enabled a far-reaching deal. While it is likely to trigger the euro zone’s first sovereign default, it also provides new powers to stop contagion spreading to bigger economies like Italy.

Some of her conservative German constituents hailed France’s acceptance of Merkel’s insistence that private creditors share the cost of a second Greek bailout as “a formidable success.”

“In terms of what was expected in recent days, the summit is a pleasant surprise,” said conservative daily Die Welt. But it went on to say that “actually the glass is half empty” as the summit’s effectiveness at stopping contagion was “questionable.”

The Financial Times Deutschland took a similar line, saying Merkel had scored a success by getting the French to accept that private creditors should contribute, but noting that Greece’s debt problems were far from over.

“NO TRANSFER UNION”

BERLIN (Reuters) – Angela Merkel lifted a weight from Europe’s shoulders by agreeing to a new Greek bailout, but Germans may feel her apparent victory in making bank contribute is outweighed by having ceded more power to Brussels.

The German chancellor had sparked a euro sell-off two days before Thursday’s crisis summit by warning the outcome would not be “spectacular” — the kind of prudence that has given her a reputation for dragging her feet on Europe’s debt woes.

In the event, her pre-summit huddle with France’s Nicolas Sarkozy and the head of the European Central Bank enabled a far-reaching deal. While it is likely to trigger the euro zone’s first sovereign default, it also provides new powers to stop contagion spreading to bigger economies like Italy.

Some of her conservative German constituents hailed France’s acceptance of Merkel’s insistence that private creditors share the cost of a second Greek bailout as “a formidable success.”

“In terms of what was expected in recent days, the summit is a pleasant surprise,” said conservative daily Die Welt. But it went on to say that “actually the glass is half empty” as the summit’s effectiveness at stopping contagion was “questionable.”

The Financial Times Deutschland took a similar line, saying Merkel had scored a success by getting the French to accept that private creditors should contribute, but noting that Greece’s debt problems were far from over.

“NO TRANSFER UNION”

BERLIN, July 13 (Reuters) – Germans’ doubts about the euro zone grow with each new bailout and Angela Merkel’s government is struggling to contain rampant euro scepticism.

The movement has no political voice. No local version of the nationalist True Finns or Dutchman Geert Wilders has made a breakthrough, partly because of taboos rooted in German history.

But resentment at funding bailouts for euro-zone partners poses a strategic challenge to Merkel’s conservative coalition.

As Europe prepares a second bailout for Greece, on top of aid packages for Ireland, Portugal and potentially Italy, and draws up a permanent bailout mechanism for future debt crises in the currency zone, Germans are running out of patience.

Ulrike Guerot, senior policy fellow for the European Council on Foreign Relations, says the German relationship with Europe has now entered a “post-Romantic phase”.

But many Germans never had such romantic notions about the euro and believe Berlin should never have thrown taxpayers’ money at countries flaunting European Union fiscal rules.

“It’s money down the drain,” 74-year-old pensioner Goetz Uhlendorf told Reuters in his modest flat in Spandau, west of Berlin.

BERLIN, June 30 (Reuters) – Germany’s lower house of parliament overwhelmingly approved an exit from nuclear energy by 2022, setting the seal on a policy U-turn by Chancellor Angela Merkel driven by Japan’s Fukushima disaster.

Opposition deputies from the centre-left Social Democrats (SPD) and Green Party joined lawmakers in Merkel’s centre-right coalition in supporting the key measure in an energy reform bill in its third and final reading.

Calling it Merkel’s “Waterloo”, the SPD and Greens said ahead of the vote the nuclear phase-out vindicated three decades of bitter opposition to nuclear power in Germany.

But German industry and the country’s neighbours fear the chancellor’s change of heart on nuclear plants — late last year she called them safe and advocated keeping them open longer – could imperil the power supply in Europe’s biggest economy.

The upper house (Bundesrat) debate on the package on July 8 will be a formality as the chamber representing Germany’s states could only block the package with a two-thirds majority — not likely in a house where Merkel is only marginally outnumbered.

The government, struggling to hit tough mid-term targets for reducing greenhouse gases, faces accusations from the renewable energy lobby that it has missed a chance to promote growth of wind and solar power more aggressively.

European Energy Commissioner Guenther Oettinger, speaking to a conference in Berlin as the Bundestag (lower house) debated the package of power laws nearby, said Germany’s neighbours were worried about its programme of nuclear shutdowns by 2022.