Here’s the latest: “The decision by G-20 finance ministers to fend off pleas for assistance pending an increase in the euro-area backstop puts the onus on Germany, the biggest national contributor to bailouts, to overcome its resistance to doing more.”
Meanwhile, today the Bundestag needs to vote on what Germany’s already agreed to. Here’s a story in German where Interior Minister Hans-Peter Friedrich unhelpfully (but perhaps correctly) muses that Greece would be better off outside of the Eurozone. This is the kind of talk that encourages every single firm and household that currently has money deposited in a Greek bank to take their funds elsewhere. Friedrich is from the Christian Social Union which is the Bavarian wing of Angela Merkel’s party, though generally more right-wing. Merkel herself is considered in German center-right circles to be a bit of a squish so she needs to watch that flank. German Social Democrats in town last week were telling me that the center-left parties are far too responsible to politicize the Greek bailout situation, which is true as far as it goes. The other way of looking at it is that they’re happy to duck and let Merkel and her colleagues own whatever happens. Greece is not a very large country and so on some level it doesn’t make sense for its insolvency to be such a big deal on the global stage. But everyone’s first choice is for someone else to pay the freight.
