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Merkel to Greece: No More Sugar

Following an inconclusive election, the situation in Greece is worsening by the day and continuing to ripple through Europe’s markets:

The euro fell and bank shares came under pressure in early trading as investors digested the implication of the Greek vote and the prospect of a challenge to Ms Merkel’s eurozone austerity after Socialist François Hollande won France’s election.

Further instability in Greece is the focus of market concern with economists at Citi, the US bank, raising their odds on the country leaving the euro to up to 75 per cent.

Angela Merkel is sticking to her guns, refusing to give Greece any more money and reiterating her calls for Greece to swallow the austerity plan as currently constituted.

Unfortunately for Greece, this may well be her last word on the matter. Merkel may be able to come to an agreement with incoming French President Hollande and with other leaders complaining about her harsh austerity programs, but she’s not likely to do so with the Greeks. From Germany’s perspective, Greece got Europe into this mess, and few German voters are prepared to sink any more money into propping up a country they view as lazy and deceitful. It’s not just Merkel: No elected Chancellor of Germany will be able to give the Greeks any more money.

And since nobody but Germany has any money to give, that’s all there is to say about it.

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  • Corlyss

    “few German voters are prepared to sink any more money into propping up a country they view as lazy and deceitful. ”

    Good Heavens! What took ’em so long? I’d have made that determination after the first revelation that the Greek leaders lied about the extent of their debt. I wouldn’t have waited until the 3rd revelation. If Greece were a contract party instead of nation, it would have been hauled into court for bad-faith dealing. You can’t bargain or negotiate with a congenital liar like Greece has proven itself to be. Obviously they think everyone in the financial system is prepared to tolerate the same level of corruption and deception that Greeks are. It’s time for them to grow up.

  • Jim.

    No one but Germany has the money… is that strictly true? Couldn’t George Soros put his money where his mouth is and write Greece a check?

  • thibaud

    “since nobody but Germany has any money to give, that’s all there is to say about it”

    The Russians have plenty of money to, er, give, and have already begun to do so. Not just their sovereign wealth funds but individual oligarchs (including GazPutin himself, we’re told) will move quickly to snap up Greek assets as soon as the inevitable dropping out/devaluation occurs.

    Russian sun-seeking vacationers will start going to Greece instead of Hurghada or Sharm. Large portions of Greek real estate will come under Russian ownership. The Greek banking system will become heavily dependent on Russian funding.

    The Second Rome may be lost to the infidels, but the Third Rome will soon step in and extend its financial dominion over Greece.

  • GC

    “…nobody but Germany….”?

    There is an election later this year in a major country. The incumbent may need to increase his support in certain states that, coincidentally, of course, happen to be home for a large number of voters of Greek descent.
    While the country is running massive deficits, the amount of “humanitarian assistance” it needed to give to Greece, say in October, just might convert a state with the necessary electoral votes into a “win” for the incumbent without tipping the compassionate nation into a full-scale financial crisis. That can wait until after the election.

  • Eurydice

    There won’t be a coalition under SYRIZA – the Germans are playing for the next Greek election sometime in June. I’m not sure why anybody thought this wasn’t going to be a chaotic process (and not just in Greece) – this is the first time the people have had an opportunity to vote on what’s been happening to them.

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