Sunday February 1, 2015 Search
Weather | Athens
16o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Waiting for a German move

By Alexis Papachelas

The US elections are over and the Greece situation did not blow up just as it wasn’t supposed to before the polls there. Now we may have a new milestone to wait for, as sources in Europe suggest that German Chancellor Angela Merkel will not be looking for a comprehensive solution for Greece before the elections in her country, which will take place some time in the fall of 2013. By “comprehensive solution,” we mean whether Greece will exit the eurozone or a long-term answer will be found to its debt problem.

The leadership of the International Monetary Fund and the Americans convinced Berlin that a Greek exit might seem cheap in terms of absolute numbers, but the repercussions may be unpredictable, and Merkel seems to have decided that she does not want to take such a risk before federal elections. On the other hand, she cannot offer a definitive solution to the problem of Greek debt sustainability, as she is being pressured to do by IMF Managing Director Christine Lagarde and the US government. For this to happen, Greece must be granted a haircut on debt held by the official sector. German Finance Minister Wolfgang Schaeuble, meanwhile, has said that if this were to happen, Germany would not give Greece any more assistance. Merkel is afraid that such a move would either be blocked by the German parliament or would come at a high political cost.

And so the German chancellor has stuck to the middle ground and Berlin will do everything in its power to put off a solution to the Greek problem until after fall 2013. The troika, for its part, will be convinced to draft reports that are not so openly negative in order not to put Berlin on the spot and so that the Greek debt can be sorted out temporarily using various tricks and half-measures.

In politics, though, and especially at times of crisis, you can rarely plan strategy with German precision. Greece may still blow up at the worst possible time for Merkel if the problem of liquidity in the real economy is not solved or if Schaueble insists once more on a supervisory mechanism for Greece that is deemed unacceptable by the IMF and other European leaders.

For Greece, Germany’s stance means that it will continue to exist in a state of uncertainty. If the threat of a euro exit is not completely dispelled, there will be no foreign investment and the mood in the domestic market will never change. The disbursement of the bailout loan will certainly provide some breathing space, but no spectacular changes, while there is also a danger that Greece itself will upset the cart in one way or another as it is wont to do. In Greek political time, 11 months is a very long time, especially given the situation right now.

ekathimerini.com , Sunday November 11, 2012 (14:38)  
Unyielding truth
This is not a game
SYRIZA must come up with ‘pragmatic solutions,’ Schulz tells Kathimerini
Strange haste
Europe waits for proposals from Athens
European officials believe that there is scope for an agreement with the new Greek government but that Athens will have to accept a compromise on its demands. Officials in Brussels told Kath...
Notes provide more clues on prison breakout scheme
Police have found handwritten notes exchanged between 22-year-old Angeliki Spyropoulou and jailed members of the Conspiracy of the Cells of Fire at a safe house in Loutraki, west of Athens, ...
Inside News
ECB’s Constancio signals Greek waiver may end if program dropped
Vitor Constancio signaled that the European Central Bank stands ready to end its acceptance of Greece’s junk-rated debt for bank funding if the government drops out of an aid program. If a n...
Greece starts countdown to cash crunch saying bailout over
Finance Minister Yanis Varoufakis set the clock ticking on Greece’s standoff with the euro area on Friday saying he’s ready to take his chances without a financial backstop rather than submi...
Inside Business
BASKETBALL
Panathinaikos preserves perfect home record
After yet another great performance at home, Panathinaikos defeated Galatasaray 86-77 in Athens on Friday to get to three wins in five games at the Euroleague top-16. The Greek champion shoo...
SOCCER
Gattuso: Unpaid OFI players couldn´t buy food
Former coach Gennaro Gattuso has lifted the lid on the plight of crisis-club OFI Crete which has been banned from playing in the Super League until it clears mounting debts with its staff. T...
Inside Sports
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Europe waits for proposals from Athens
2. Notes provide more clues on prison breakout scheme
3. Drug prices are falling but volume sold remains high
4. Tsipras plays down chance of rift
5. Ex-revenues chief Theoharis claimes political interference
6. Journalist to head Greece´s National Intelligence Service
more news
Today
This Week
1. US to work closely with Greece and EU to resolve differences, says White House
2. Merkel rejects debt writedown for Greece
3. Greek bank debt plummets as investors head for the exit
4. Greek markets plunge as SYRIZA digs in on challenge to austerity
5. Tsipras says Greece to repay ECB, IMF, reach deal with euro area
6. Greece seeks EU allies but Germany holds firm
Today
This Week
1. Greek Elections 2015 | LIVE
2. SYRIZA heads for historic victory but without majority
3. SYRIZA's win will test institutions
4. Greek Elections 2015: The day after | LIVE
5. EU must accept that Greek debt relief is inevitable
6. Athens may veto further EU sanctions against Russia
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.