02-22-2015, 03:34 AM
There is a paradox in Germany's financial Puritanism: this theological commitment that all debts must be repaid on the originally specified terms could be much more expensive for it than cutting Greece some slack. If Greece were to leave the euro, Germany's losses would be greater than any other country's, as Greece's biggest indirect creditor via bailout loans and European Central Bank support.
BBC News - What will Germany pay for not compromising with Greece?
The Greek debt crisis was reportedly close to coming to physical blows earlier this week. The French paper Libération reported Wednesday that Greek Finance Minister Yanis Varoufakis got into a heated confrontation with Eurogroup president Jeroen Dijsselbloem on Monday afternoon at the meeting of European finance ministers trying to hammer out a deal on the Greek bailout.
Report: German and Greek finance ministers not on speaking terms - Business Insider
If Greece is forced out of the euro in acrimonious circumstances - a 50/50 risk given the continued refusal of the creditor core to acknowledge their own guilt and strategic errors - the country will not only default on its EMU rescue packages, but also on its "Target2" liabilities to the European Central Bank.
ECB risks crippling political damage if Greece forced to default - Telegraph
“We have already done more fiscal tightening than has ever been done by any country in peace-time, and Greece is still in depression with declining nominal GDP. There is no macro-economic argument that can be made for further tightening,” said Mr Varoufakis. “The only reason for doing so is out of ideology or on punitive grounds. All we are seeking is a way to end the debt-deflation cycle and restore the credit circuits of the Greek economy,” he said.
Greece defiant as Germany tears up last-ditch EMU compromise on austerity - Telegraph