NP - Europe's Empress Stays Silent

[Kamil Prusakowski]

http://www.bloombergview.com/articles/2015-06-17/what-if-greece-just-disappeared-
the Invisible

2015-06-29 16:42 GMT+02:00 David Morris <fqmorris at gmail.com>:

>
> http://www.politico.eu/article/grexit-greece-merkel-empress-stays-silent-germany-debt-default/
>
> When Greece first called on Europe to save it from collapse in 2010,
> Merkel faced a stark choice: follow the advice of the world’s leading
> economists and offer Athens a path to debt relief in exchange for reform or
> heed the demands of her center-right coalition by extending loans at
> punitive interest rates with no debt forgiveness.
>
> Europe’s other power centers — Paris, the European Commission and the
> European Central Bank — would have endorsed the softer approach.
>
> But German public opinion was solidly opposed. Germans feared letting
> Greece off the hook would create a dangerous precedent, leaving Germany to
> bail out Europe’s other Schuldensünder, or debt miscreants.
>
> Merkel, with a PhD in physics and a reputation for cool calculation, chose
> politics over economic reason. That strategy now lays in shambles.
>
> “When it comes to the eurocrisis, one can’t ignore that her government’s
> crisis policy has not worked,” Henrik Müller, professor at the University
> of Dortmund wrote in a Sunday column for Spiegel Online. “What the
> chancellor might see as the path of least resistance has created an
> untenable situation in the long-term.”
>
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