Germany offered Greece further aid to establish a growth fund on Thursday, but a German member of the European Parliament (MEP) told CNBC the amount was too small, and came two years too late.
During a visit on Thursday, Germany's finance minister, Wolfgang Schaeuble proposed giving Greece 100 million euros ($131 million). However, Jorgo Chatzimarkakis, an MEP with Germany's Free Democratic Party, said that the offer was a "good sign", rather than a real help to the dismal Greek economy.
"This is urgently needed money, but 100 million euros is much too low as a spur for the Greek economy," said Chatzimarkakis, who is German-born but of Greek descent.
"It's a good sign but it's just a sign, it doesn't help the real economy. During the crisis, Greece has lost one million jobs, according to the OECD [Organisation for Economic Co-operation and Development], whereas Germany has won some 500,000 jobs…they need to stop this downwards spiral, and 100 million for a fund that doesn't exist is not the right answer."
Greece's economy shrank 5.3 percent year-on-year in the first quarter of 2013, after contracting 5.7 percent in the previous quarter. Meanwhile, unemployment rose to 26.8 percent in March 2013, according to Eurostat. One in two Greek young people are unemployed.
Chatzimarkakis added that Germany's offer also came too late to help Greece, and would take still longer to enter the real economy. "It wouldn't make any difference for the moment, because the fund does not exist," he said.
"We are talking about a fund which should have been ready for two years now. Greece is the only European country without such a development fund and it will be ready in December, so the 100 million euros that Schaeuble is bring along will have to wait a while until it enters the real economy."
Schaeuble's visit came at a time of heightened tensions in Greece, after the Greek government voted to cut thousands of public sector jobs on Wednesday. Greek police opted to ban public protests during Schaeuble's visit, which were viewed as likely, due to the perception that Germany is an instigator in inflicting the harsh austerity measures on which Greece's international bailout depends.
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On the eve of his visit, Schaeuble told German TV station ARD that he wanted to show support and trust in Greece. "I'm not the super-troika [the committee charged with organizing loans to euro zone countries, comprising of the European Commission, the European Central Bank and the International Monetary Fund]," he said, adding that he empathized with Greek anger at austerity measures.
Rather than being an olive branch to Greece, however, Chatzimarkakis said Germany's offer of aid was an attempt to placate the Greeks ahead of Germany's national elections in September.
"This visit to Athens is rather a visit saying, 'you're nice guys, please stay quiet until 22 September'," Chatzimarkakis said. "Everybody thinks after the German elections things will change dramatically."
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt