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Wednesday, January 28, 2015

Germany Pushes For Grexit

On Monday I wrote the following about Greece:
"The reality facing Greece is that as and when Syriza's attempts to renegotiate/renege on the terms of the bailout fail (and they will), Greece will be faced with the choice of continuing with the terms of the bailout or leaving the Euro.

As regards the latter, there are already plans in place (in the ECB and banks/financial organisations within the Eurozone) for such an exit which Germany will be keen to implement. Greece has, whether it realises it or not, has voted for an eventual exit from the Eurozone
."
A mere two days on, and the plans for pushing Greece out of the Euro are being made public and openly discussed.

The Institute of German Economic Research (IW) is quoted by the Telegraph:
"Financial support must be cut off if Greece does not comply with its reform commitments.

If Greece is going to take a tough line, then Europe will take a tough line as well."
In other words the IW wants Greece expelled from the Eurozone.

ZEW research group also added to the calls for Greece, if it won't abide by current agreements, to be pushed out of the Eurozone:
"Europe should clearly signal that it is not susceptible to blackmail."
Germany’s finance minister, Wolfgang Schäuble, said:
Anybody discussing a haircut just shows they don’t know what they are talking about.

In contrast to 2010, the financial markets have faith in the eurozone. 

We face no risk of contagion, so nobody should think we can be put under pressure easily. 

We are relaxed.”
Let us not be under any illusions, Germany wants Greece out of the Euro. The Greek people have, unwittingly, given the Germans the excuse to push Greece out.   

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