GREEK CRISIS: Merkel’s ‘unexpected’ U-turn – Spiegel

The German Chancellor has decided to do the only thing she was ever going to do.

It will come as no surprise to committed Sloggers that Spiegel today carries a story saying that Angela Merkel will not be allowing Greece to exit the eurozone.

On May 28th this year, I posted this:

‘Finally – and this is the last time I’ll say it – Greece isn’t going to leave the eurozone: Draghi won’t let them, the Greeks themselves are wrongly terrified by the idea, and anyway a more pro-bailout Party line-up will emerge after the June 17th elections. Somehow in some way, there will be a compromise at the end of  a long stand-off.’

Aside from the bollocks about that being the last time I’d say it, the prediction above has proved pretty spot on. This is a briefly extracted summary of the Spiegel stuff:

‘Merkel has already made up her mind. She has sided with French President François Hollande and the European Commission. The report from the troika will undoubtedly conclude that Greece can remain in the euro zone. Merkel’s newfound determination to rescue Greece is a remarkable U-turn for the chancellor. Until recently, Merkel was prepared to drop the country if it failed to meet its commitments. But she now regards a Greek departure from the euro zone as entailing too many risks.’

The ‘only just decided’ stuff I think is almost certainly tosh. On August 12th, I posted ‘Deal has been done to forgive residue of debt’:

‘Now a close French diplomatic contact has told The Slog:

“Brussels or Berlin…or both…or others…have given Samaras a big reassurance that if he sticks with the [austerity] programme, Greece will not be thrown out of the euro. Those same people have given similar assurances to the key players in the IMF and bondholder groups…that if they take another haircut, the EU will pay off the balance and give them their money back. The secrecy is to do with Merkel being flayed alive at home if they thought she was doing this, and Draghi ensuring that his central bank doesn’t become an open door for insolvent States and panicky bondholders.”’

Today, Spiegel asserts, ‘If the Greeks need more money in the fall, the payment tranche will be increased accordingly. Later transfers would be reduced in return.’

Sounds like debt forgiveness to me. On August 28th, The Slog had this to say:

‘I have said from the start of this ridiculous tableau that there would be a Schäuble of bombast followed by a slither of softening-up of spin, followed by the deal which was scoped out a fortnight ago. This is just the beginning. The fact is that there is no real anxiety in Washington about a possible Greek exit. As I’ve maintained from Day One, there isn’t going to be one. Samaras has alternative fish to fry, and the EU knows it. It also doesn’t want Greek instability at the same time as Spanish banking collapses.’

Spiegel today:

‘If Greece withdrew from the euro zone, her advisers fear that this could mean that it would eventually be necessary to create a common “debt union” to stabilize problem countries like Italy and Spain.’

To be fair to Spiegel’s correspondent, he obviously thinks the Chancellery ‘changed her mind’ line is guff too. He writes, ‘Attentive observers already noticed the chancellor’s apparent change of heart two weeks ago. Merkel has suddenly discovered a deep affection for the downtrodden people of Greece. She compassionately expressed empathy for “what many in Greece have to suffer,” and said that “it does make one’s heart bleed.”

Whether you think Frau Doktor Merkel has feelings or not, the assumption of the Spiegel piece overall is that she is still in the European driving seat, which of course isn’t true at all….as recent events have shown. Mario Draghi stuck two fingers up her nose on the bond-buying bonanza, and the Greek prime minister Antonis Samaras has failed to deliver the approval of his two coalition partners for the €11.5bn of cuts – both of whom think the Germans will negotiate in the end.

What’s more, the Karlsruhe Court is stalling on the ESM decision, and the troika has not accepted that the measures being proposed by the Athens coalition will cut the mustard.

So while Slog de Big’ead is very happy to be proved right, Spiegel is – for my money – vastly overestimating the degree to which Geli is still The Supreme Being.

And so it goes on. George Soros today piped up (as George always does when minded to directionalise something) and told Berlin it was “time to lead or to leave”. You read it here last May: Germany will leave the eurozone before Greece does.

42 thoughts on “GREEK CRISIS: Merkel’s ‘unexpected’ U-turn – Spiegel

  1. John, there is no chance Obama is going to allow financial meltdown in little old Europe to scupper his chances in November and since Michelle hasn’t commandeered one of the world’s best beaches for her own private use for at least a couple of months, I’d say she’s chomping at the bit for another term and another US Taxpayer funded $18 million get-away-from-Washington-and take-a-small-secret-service-army-with-you-cation.

    I think it’s safe to presume the Troika will not be reporting on Greece before the US Election, unless it’s to say “buy another submarine, TWICE” and all is forgiven,

    This however, only kicks the can even further down the road and a bit too close to next years elections when Der Fuhrerine wishes to become First Lady of Europe all over again, because she’s seen what happened to Sarkozy and doesn’t fancy fleeing in the middle of the night to the “East” because she’s heard that Europol are on their way to raid her apartment?

    On a lighter note, I’ve been banned John, from commenting on the Telegraph website for proposing to run a campaign to deny Nick Clegg his prize of an EU Commissioners job and it seems that someone, somewhere didn’t like it.

    Face it, even Balls and the Millipede are now openly in cahoots with Lib Dem Non-Business Minister Vince Cable, because everyone knows that the plan is that by the next UK GE, Nick Clegg, the most Europhile man in possibly the whole of Europe (let alone the UK) is expecting to be the latest Euro(Lottery?) tax free millionaire Commissioner, looking after GB’s interests in Brussels, except even my gerbil knows if he is allowed anywhere near creating new legislation for the whole of Europe, he’ll do more damage to the people of the UK and to Europe entire than Hitler himself.

    Why don’t you run a story on that one John? If Dave somehow thinks Nick Clegg would be acceptable to the UK population as an EU Commissioner, then he’s even more deluded than we think he is although in fairness, I know that he thinks he doesn’t care, EXCEPT, he himself will be going to ballot box himself where the little people will let them know exactly what they think.

    Who’s progression does he value more? His own, or Nick Cleggs?

    Gosh, glad I got that out of my system.


  2. ‘But she now regards a Greek departure from the euro zone as entailing too many risks.’
    Or put another way, too risky for Germany to let all those juicy natural resources slip away into the hands of the US.
    Spain’s banks will not collapse as Draghi will print enough to around.
    Karlsruhe will fudge the ruling leaving it open to interpretation and Merkel will have a free hand.
    It isn’t rocket science, is it?


  3. It all depends on the burn rate of Euros given to Greece. If they run out of money before Merkel can get reelected then she won’t be.


  4. The reason Greece can’t leave the EU is simple. Remember the days when Greek debt was AAA rated? This debt was leveraged by god knows how many times, 10, 20, 30, 350? I don’t know and I don’t think anyone else does.

    A Greek exit would start people counting and that would never do would it.


  5. Pingback: John Ward – Greek Crisis : Merkel’s ‘Unexpected U-turn – Spiegel – 10 September 2012 | Lucas 2012 Infos

  6. Hate to say I told you so… but when they found (at least) 300 billion $’s of oil just south of Corfu (and much, much, much more in the Aegean)… Merkel began to care about Greece again. JW… you were wrong about one thing… it is impossible to have a change of heart when you don’t have one.


  7. Sorry but I think Merkels `bleeding` heart` is just an alibi for when the feta hits the fan. It`s all about avoiding blame. A country on the verge of exploding will not be saved by the money that is being dangled like a carrot on a stick…..most of which goes back to foreign banks.
    Smoke and mirrors.


  8. Well we are indeed in for a couple of ‘entertaining’ days ! We’ll get a hint as to how far Karlsruhe is being ‘nobbled’ this morning, when they decide if Draghi’s new cunning plan needs a longer think. IF markets get any hint that the ESM might not be activated next month, I’ll be interested to see just how high Spanish Bonds can go. At a guess the Dutch are going to spend until Christmas trying to form a viable Govt too…but we will see !

    Although discussing Greece here, lets not forget that today (Sept 11) is Catalonia’s National Day – a public holiday. Support for independence now appears to have a clear majority there and from what I read, anger against the central government is very high……so I’d expect to see a lot of Catalonians on the streets this afternoon. I am starting to wonder if the EZ crisis might lead to the break up of Spain….it is so much looser confederation than most other EU states and I really wonder if this is why Rajoy is so terrified of asking for a formal bale out….he may not be able to deliver any Troika terms because the regions will not pay any attention to them or they will use it as an excuse to try to go it alone.

    There probably was a window for Grexit earlier this year, before anyone had any idea of the depth of the Spanish ‘Doo-Doo’…(does anyone really know now?) but I agree with JW’s post that the risk of a Greek Domino taking out Spain is now much too great. How Geli spins to her taxpayers lightening up Greek Austerity terms and still giving them the next tranch should make hilarious reading.


  9. Hellas because of her “Geopolitical status” ,“Energy reserves “ and “ Mineral reserves” unfortunately or fortunately still a claimed colony.

    Let’s wait to see the winner.

    However at the end , there it will be an end, I hope that all seedy Hellenic political elite and their colaborators will be excoriated and hanged at Syntagma Sqr.


  10. @kfc Yup, I read this too…….which is, in itself intriguing ! Either you’ve been right all along and Karlsruhe have been well and truly ‘nobbled’ or their ruling tomorrow will come with such a devastating list of restrictions as to render Peter Gauweiler’s petition totally irrelevant…..the Universe will shortly unfold !


  11. They turned down only one part of his Friday evening emergency appeal, the part to change the Wednesday proclamation date of their verdict. They did *not*, however, turn down his emergency appeal regarding the ESM and its constitutionality in regards to the german basic law.

    After they told the world that today, the €uro immediately “soared” to 1,28$, quite interestingly …

    Either his appeal will be overruled on grounds that the german federal court is not cognizant for european law and Gauweiler will be advised to appeal to the european courts or they already have decided that his part of the lawsuit fits into what their verdict will be tomorrow on the ESM.

    The german press presented it all as “Gauweiler’s emergency appeal dismissed” today, which is clearly not the case and a typical media abbreviation of reality. After the comment area of “Der Spiegel” was filled with complaints on their lax handling of the story they changed the regarding text meanwhile and i am sure the rest of the press pack will follow suit.

    The ESM treaty gives Germany a (more or less hidden) veto right of sorts in financial regards and thus would leave her in a rather powerful position financially. I would not wonder, after reading quite a bit for some years now, since yesterday even more so, if that would be mostly the reason behind that whole charade of the ESM. In Germany itself the ESM is considered as the means of the broken south and the anglo-american banksters mafia to rob the country and to make it the pay-slave of Europe again for centuries to come. What 97% of the people in Germany do *not at all* realize is the power game in which the German gouvernment is involved in, as a main player, and its implications and responsibilities. The majority of the people in Germany have no understanding whatsoever on what is “really” going on, and those who understand or at least are near the facts in their realization of what is going on do not possess the power to change anything.


  12. Big march for independence planned for 6pm local time in Barcelona. The protesters are wanting Catalunya to exit Spain, and become a ‘new state of Europe’.
    There are an awful lot of angry people here fed up with the austerity afflicted upon them by Rajoy, when all their taxes end up in Madrid, and less and less comes back to Cataluyna.


  13. NO GREEK has been asked about this. Greeks may want it but the last vote did not say so. The current government exists ONLY due to an electoral law alchemy that gives the fisrt one, +50 MP’s. BOGUS. But the Eurosleaze has made sure that the opposition is nicely split up along pre 1989 lines.


  14. Out in the cold apparently – from the DT:
    “Protesters from communist-affiliated trade union PAME are out in the streets of Athens today, blocking the entrance of the labour ministry as a troika meeting is scheduled to take place. A government spokesperson said: “We’re trying to find a way to get the troika officials into the ministry”.


  15. O/T
    Fellow sloggers, do you think everything is A-Ok with JW? Normally, if he’s unable to post, for whatever reason, he would inform us. This length of silence is most unusual.


  16. @Liz O’Donnell; I would hazard a guess at personal problems at home, his wife has not been at all well recently. Let’s hope she gets well soon. Of, course I might be way off…..apologies if I am.


  17. @kfc
    I was thinking along the same lines, kfc, particularly since his recent post about their visit to the consultant. Fingers crossed and kind, positive thoughts all round methinks.


  18. Pingback: EUROBLOWN: Troika rejects 45% of Athens Coalition ‘savings’ | A diary of deception and distortion

  19. Pingback: John Ward – Euroblown : Troika Rejects 45% Of Athens Coalition ‘Savings’ – 12 September 2012 | Lucas 2012 Infos

  20. Pingback: Greeks of holding out - NT Markets

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