HispanicBusiness

German Chancellor Angela Merkel defended Tuesday the austerity imposed on Athens, five days before Greece's general election, as necessary to set an example to the entire eurozone.

"The question of whether Greece carries out its programme is not just a question of whether the programme succeeds or not, but rather of whether obligations will be observed in Europe in future," Merkel told an audience of Christian Democratic Union-supporting business leaders.

She stressed that a bailout sought by Spain for its banks was different from the bailouts for Greece.

"I find it correct that Spain made an application for the recapitalization of its banks, because the problems of its banks do not cover up any lack of macroeconomic reforms, but are the result of a real-estate bubble over the past decade," said Merkel.

"There will be conditionality for Spain when the application arrives. It will require restructuring of the banks," she said.