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Riot policemen defend their position beside a burning van during violent protests against austerity measures in Athens' Syntagma (Constitution) square, June 28, 2011. (Yannis Behrakis/Reuters/Yannis Behrakis/Reuters)
Riot policemen defend their position beside a burning van during violent protests against austerity measures in Athens' Syntagma (Constitution) square, June 28, 2011. (Yannis Behrakis/Reuters/Yannis Behrakis/Reuters)

A tale of two Europes Add to ...

One reason for the tangible lack of concern could be Germany's economic boom. Growth has been so good that Berlin took in 10.1 per cent more in taxes in the year to May. That's allowed Chancellor Angela Merkel's government to soften its fiscal stance and put tax cuts back on the agenda.

It also means that Germany's Mittelstand companies - the mid-sized enterprises that famously drive Germany's economy - are flourishing. Though many of those companies' executives are aware of the financial turmoil in some of their favourite holiday destinations, few have been badly hit by the crisis, at least at home.

In Stuttgart, "we haven't felt a direct impact of the Greek sovereign debt crisis on our business. We operate very regionally and therefore have no exposure to the periphery countries which are currently struggling," said Stefan Huebner, managing director of a wine manufacturing company in the industrial neighbourhood of Untertuerkheim, as he wanders around his grand wine cellar housed in a Second World War bunker. "Generally we were pleasantly surprised by the lack of impact from the financial crisis in 2008 and 2009 too."

Not every company is completely shielded, of course. GFT Technologies supplies IT solutions to the global financial services industry. CEO Ulrich Dietz says that while the impact of the crisis is limited, it is noticeable in two distinct ways.

First, 800 of his 1,300 employees work in Spain, where unemployment is more than 20 per cent. "The high unemployment rate, especially in the young generation, is very taxing and our workers down there are finding the whole situation kind of depressing," he said.

At the same time, the euro's weakness against emerging market currencies over the past few months has "really impacted us" in places such as Brazil. "Because the euro is weak, the real is becoming very expensive when we do business with Brazil."

A QUESTION OF RISK

As Germany's bankers and bosses scrutinize the Greek bailout, there is little unanimity.

"For Germany the financial bailout package is primarily about avoiding having to find out what would happen if the global financial system were to falter like we saw during the Lehman crisis," said Holger Schmieding, chief economist at Berenberg Bank in London. "Naturally, it's also about Greece, but primarily it's about removing the risk of contagion."

GFT boss Mr. Dietz believes that the euro zone should discuss Greece leaving the euro zone. The country "cannot be saved with this financial help on a six-month basis. If Greece did exit the euro it would save Germany, France and other countries a lot of money."

Others are less keen on such a drastic move. "We can't just chuck them out!" said Thomas Voehringer, CEO of Voehringer GmbH, a family-run wood manufacturing company with about 180 employees.

Mr. Voehringer believes that cutting a "weak link out of a chain" is not the answer, preferring instead to muse about more innovative and creative ways to save the Hellenic Republic. "I sometimes wonder whether Greece can't just sell some of its islands to some super-rich people. Perhaps that would solve the problem!" he adds, echoing a common suggestion in Germany.

Plenty of Germans point to differences between the Greek and German work ethic. Mr. Voehringer relates a story about a friend who went sailing in Greece and had to wait for hours to pay a port charge of €4.25. "There were four people at the pay station, but one was watching TV, another reading the paper or doing other things," he said. "My friend said that he would have preferred to have paid €25 and not had to wait. Perhaps this mentality and lack of efficient bureaucracy is the reason why Greece is now in trouble?"

But there's also recognition that the banks should carry some of the liability. "Everyone should pay up who is accountable, whether public or private," Mr. Wolf said. "Anyone who holds Greek bonds has to pay and admit responsibility. If you buy into a company and that company fails, you also have to carry the financial burden. All deals come with a risk and this risk has to be accepted even if things go wrong."

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