Günter Grass attacks Merkel for Athens policy

The Nobel laureate sends a stinging rebuke to the German Chancellor for her uncompromising attitude to the struggling economy

The world's leaders and economists, having put in their euro's worth on Greece and currency union – to no great discernible effect, so far – yesterday, one of the planet's most respected literary figures joined in. Germany's Nobel literature laureate Günter Grass criticised the treatment of Greece in the debt crisis, describing it in a new poem as a "country sentenced to poverty".

The 84-year-old's latest work, "Europe's Disgrace", was published in the daily Sueddeutsche Zeitung. It comes less than two months after Grass triggered a storm of criticism with another intervention on a political issue – a prose poem sharply criticising Israel amid the dispute over Iran's nuclear programme. As Greece struggles with austerity and reform programmes demanded by creditors in exchange for rescue loans, and speculation grows that it may leave the 17-nation eurozone, Grass springs to its defence, and, by implication, criticises his own country's attitude to it.

The poem is a stinging rebuke for Chancellor Angela Merkel's conservative-led government which has insisted that austerity is the only way that Greece can balance its books. The author accuses Europe of forcing Greece to drink from a poisoned chalice and describes it as a "country now hardly tolerated". In the poem, he says Greece has been "pilloried naked as a debtor". He writes: "You will waste away spiritlessly without the country whose spirit, Europe, conceived you."

Günther Krichbaum, the head of the German Parliament's European affairs committee and a member of Ms Merkel's conservative Christian Democrats, shrugged off Grass's words. He said: "His criticism completely bypasses reality – particularly the reality that Greece was helped enormously with enormous efforts, which, in the end, do not come from states but from citizens and their wallets."

Grass's intervention follows the uncompromising words of Christine Lagarde, the head of the International Monetary Fund, that Greeks should pay their taxes in full, adding that the full force of her sympathy was directed elsewhere than Athens. "I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education," she said. "I have them in my mind all the time. Because I think they need even more help than the people in Athens."

There were reports yesterday that the leaders of France, Germany, Spain and Italy will meet in Rome on 22 June to discuss the eurozone crisis, according to the French newspaper Le Figaro, citing Italian government sources. Italy's Prime Minister, Mario Monti, had suggested a meeting with Chancellor Merkel, the French President, François Hollande, and Spain's Prime Minister, Mariano Rajoy, but there was difficulty setting a date. Ms Merkel had appeared lukewarm on the idea, which Mr Monti said was needed to clarify the issues at stake before a full EU summit on 28 and 29 June.

One of the items on that agenda may be a proposal, reportedly being formulated in Germany, to bring economic reforms to places such as Greece that go beyond mere austerity. Chief among the objectives would be the creation of special economic zones with tax relief for incoming businesses, relaxing employment laws (adopting German-style "mini-jobs" which allow part-time posts to be free of employers' national insurance or pension liabilities), and, especially, a major push for privatisation. Greece has not yet sold a single state enterprise, and any plans, lukewarm as they have been, are in abeyance until after the general election on 17 June.

Greeks are due to go to the polls in a repeat election, which many fear could result in a government intent on ripping up the international bailout programme and lead to Greece's exit from the eurozone. France is due to hold parliamentary elections on the same day, with the new socialist president hoping to secure a left-wing majority to help him implement tax-and-spend plans.

In Athens, there is some sign that the week's resolute message from eurozone leaders – that deep-seated reform of the Greek economy is non-negotiable, and that contingency plans for a possible Greek euro exit are being made – is beginning to have an impact on voters.

On 6 May, by giving a significant uplift to the Syriza party which is opposed to the euro bailout terms, voters delivered a result that made plain their fatigue with austerity and the apparent hopelessness of their economic plight. The result left parliament divided evenly between groups of parties that support and oppose the austerity conditions attached to a €130bn bailout agreed with the European Union and IMF in March. The failure of the two parties that have dominated Greece for decades – New Democracy and Pasok – to win a pro-bailout majority, and the success of Syriza, which came second, meant that the eurozone crisis flared into prominence yet again.

But the latest poll gives Greece's conservative New Democracy party, which backs the international bailout, a slight lead over the leftist Syriza. New Democracy was backed by 23.3 per cent of respondents, while Syriza scored 22 per cent, according to the survey by pollster MRB for the weekly newspaper Real News.

This follows three polls published on Friday, two of which put Syriza ahead, but two showed gaps of less than 2.2 percentage points between the two parties. Greek election rules give the party that comes first an automatic bonus of 50 seats in the 300-seat parliament, so that even a slim advantage could play a decisive role in determining which party gains power. Yet polls consistently show that three-quarters of Greeks wish to remain in the eurozone.

Greece's debt crisis has plunged it into five straight years of economic contraction, thrown half of its young people out of work and led to a considerable depletion of funds in the country's banks. In the past two years, Greeks withdrew €72bn from bank accounts, leaving just €165bn behind. Since then, withdrawals have accelerated. Some of that money was wired abroad and some spent, but much of it was hidden in homes, either in cash or converted to gold.

The unexpected bonanza is attracting foreign crime networks, including two from the former Soviet state Georgia which police dismantled in recent months, blaming them for 300 burglaries. One officer told Reuters news agency that he had come across a man who had €30,000 in cash and gold stolen from a storage room next to his house, and an elderly woman had her life savings of €100,000 stolen from her apartment.

A banker reported the case of a family on the island of Rhodes who recently visited their local branch, trying desperately to figure out how much their late father had withdrawn from his account before he died. Not trusting the bank, the old man had taken out his life savings. But he hadn't told anyone where he hid it. His children were searching everywhere, tearing down walls in the house trying to find it, but with no luck.