Are the Mediterranean Euro countries hoping to use a Syriza victory in Greece to pry a looser monetary policy from the Germans? New comments from France’s Finance Minister, Michel Sapin, certainly suggest so. The Financial Times reports:
“Whatever the result of the election will be, it is absolutely fair and legitimate that discussions should take place between the EU and the new Greek government,” he said. “What we would think is extremely important is the stability of the eurozone.”“All the possible issues will have to be dealt with within these discussions between the new Greek government and the EU,” said Mr Sapin. “Of course Greece will have to carry out more reforms, but they have already done a lot of reforms, and we will have to show solidarity within the eurozone.”
This will surely be welcome music to the ears of Mr. Sapin’s anagram, Spain, as well as Portugal and Italy, all of whom would welcome a euro that was more in line with their traditional monetary policies. Meanwhile, his comments diverged sharply from noises emanating from further north, particularly from the Germans and the Finns, who want the line held firm on austerity—and have even said they’d be willing to expel Greece from the currency to do so.The Greek elections are going to be just the start of a process of negotiations and/or brinksmanship. Both the northern and the southern blocs, it is increasingly clear, will strive to use it as a proxy fight for the broader political issues roiling Europe. The European elites are masters at kicking the can, but watch out—they may be running out of road.