Germany’s “Official Denial”
If you seek confirmation that Germany is actively trying to force Greece out of the Eurozone, strong evidence appears in the form of an “Official Denial”
Please consider Merkel Says Won’t Force Greece Out of Euro
German Chancellor Angela Merkel said on Tuesday she did not want to see Greece being forced out of the euro, warning that this would have “unforeseeable consequences.”
“I will have no part in forcing Greece out of the euro,” she said in response to a question from a Greek student at a meeting with young people in a Berlin museum.
“We don’t do it to make things difficult for people, what would be our interest in doing that? But we want to reach a point where Greece can, with European help, live off its resources,” said Merkel.
“Nobody wants to force reforms on them from outside,” she said.
“Official Denial” Theory
For a discussion of the “official denial” theory, please see Eurozone Breakup Logistics (Never Believe Anything Until It’s Officially Denied)
Cede Budget Sovereignty Roadblock
Right in line with “official denial” theory, Germany started placing as many roadblocks as possible on Greece.
On January 27, Merkel demanded Greece to Cede Sovereignty to Eurozone “Budget Commissioner”.
Unfortunately for Germany, French president Nicolas Sarkozy shot down the idea. However, Germany would not let it drop and two days ago Merkel floated a similar idea disguised as a Spaghetti-O.
For details of the Spaghetti-O loop proposal, please see New Merkozy Proposal “I will Give You Money If You Give It Right Back”; Mathematical Scam to Prevent CDS Triggers
Schäuble Starts Salami Tactics
In addition to the Spaghetti-O loop, Eurointelligence discusses the “Salami Roadblock”.
According to Financial Times Deutschland, Wolfgang Schäuble now wants the Bundestag to vote only on a fraction of €30bn out of the total cost of the second Greek rescue package of €130bn. He is supported by the finance ministers of the Netherlands and Finland who met as part of the secret meeting AAA-rated ministers. The reason for this unexpected move is that the coalition has reason to fear that the general exasperation about the lack of progress in Greece made it uncertain that it would be unable to get the necessary parliamentary for the whole package. Also the coalition wants to keep up maximum pressure on Greece. In Brussels the Berlin, the move was greeted with surprise and irritation, the paper reports.
Finance Minister Wolfgang Schäuble Calls For Vote
Courtesy of Google Translate, please consider Finance Minister Wolfgang Schäuble Calls For Vote
Greece is waiting for € 100 billion – but in the coming days, the federal government wants to release a maximum of 30 billion. This announcement Schäuble irritates the Euro Group.
The federal government wants to delay the comprehensive aid package for Greece. Finance Minister Wolfgang Schäuble (CDU) announced in the coming days initially provide only 30 billion euros to cover for banks, which suffered a cut debt. The release of an additional € 100 billion envisaged for the salvation of Greece to the Bundestag will not until further submitted to a vote.
Greece should get even more money?
Thus, Germany could once again gain time – either to wrest Greece in the meantime, further cost-cutting efforts, or even prepare a subsequent bankruptcy
Greek Deal Done?
Earlier today we heard Greece accepted a deal. Not so fast. The Washington Post reports German FinMin: Greek deal on spending cuts appears to not yet fulfill bailout conditions
That title was the entirety of the article.
IMF Says No Deal
Zero Hedge reports Greek Deal Done? Not So Fast Says IMF
- IMF SAYS IT’S NOT FORCING AUSTERITY ON GREECE AS TALKS CONTINUE – BBG
- RICE SAYS IMF “WELL AWARE HOW DIFFICULT’ IT IS FOR GREECE – BBG
- IMF’S RICE SAYS IMF MINDFUL OF `HARDSHIPS’ IN GREEK PROGRAM – BBG
- RICE DECLINES TO SAY WHAT IMF SHARE OF NEXT GREEK LOAN WILL BE – BBG
- IMF SAYS ‘PRIOR ACTIONS’ LIKELY TO BE REQUIRED BEFORE FUND OK OF NEW GREEK LOAN PROGRAM – DOW JONES
Read that first bullet point carefully. We now have an official denial from the IMF. However, it is of secondary importance because it pertains to austerity measures and not a eurozone exit.
Also read the last bullet point closely. Now the IMF is placing roadblocks.
Zerohedge jumps to conclusions regarding the last bullet point “By the way, dear US taxpayer, the IMF – that’s you.”
My take: Congress is not going to allocate any money for this boondoogle.
Germany Forcefully Seeking to Dump Greece
In spite of denials, it is quite obvious Germany wants Greece out of the Eurozone. However, France and other countries do not. The IMF appears to be siding with Germany, and that is a big change.
If there is a deal, don’t expect it to last. Greek elections are coming up, and even if they halt those elections (quite likely if a deal is reached), Germany will simply place more and more demands on Greece as soon as Greece misses budget targets (almost immediately).
Why These Games?
Germany seeks to absolve itself of any guilt for what happens to Greece. It wants Greece to make the exit choice, while placing as many roadblocks as possible to force Greece to do just that.
Mike “Mish” Shedlock
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