Germany’s Finance Minister Puts Grexit Back on the Agenda

The German's really don't want to give Greece anymore money, and I don't blame them.

They made the terms of a Greek bailout so onerous that it is causing NYC loan sharks to reconsider their comparable mild demands. And yet the crazed Greek officials jumped at the insane deal.

The Germans are betäubt.

Speaking before a key Bundestag vote on Friday, German Finance Minister Wofgang Schäuble said voluntary departure from the eurozone “could perhaps be a better way” for Greece than a proposed €86bn bailout package.

But the 72-year-old German minister said he would still personally put the package to parliament. FT notes:

His hollow-sounding pledge was eerily familiar to one from Athens this week, where Greek premier Alexis Tsipras presented the same plan to Greece’s parliament while admitting he did not believe in it.

Mr Schäuble’s manoeuvre makes clear he is leaving open a Grexit option, even as he is formally backing the latest rescue plan to keep Greece in the eurozone. It is uncertain how much leeway he has been given by chancellor Angela Merkel to advance a historic rupture of the eurozone that he believes would ultimately strengthen both Greece and the single currency..

Even if he favours a Grexit, Mr Schäuble may have to take a roundabout route to get there. He is wary of being seen to push Athens out the door for fear of breaking Germany’s decades-long commitment to European unity...

Some EU officials believe Mr Schäuble’s repeated insistence that the IMF, which has partnered the EU in previous rescues, be included in a new bailout may be intended to engineer an eventual Grexit. The IMF has suggested it might not join a new Greek programme once its current rescue expires in March without heavy restructuring of existing eurozone loans. One EU official said Mr Schäuble could use this as “an excuse”.

-RW

UPDATE

German chancellor Angela Merkel on Friday won the Germany parliament's backing for the €86bn Greece rescue plan despite an embarrassing revolt by an estimated 50 of her own conservative CDU/CSU MPs.

However, FT notes that the skeptics' protest, combined with warnings from hawkish finance minister Wolfgang Schäuble about the difficulties ahead, signaled that the package could face further challenges in Germany before Athens and its creditors reach a final agreement.