"Germany Disappoints Greece, Again
Anybody looking yesterday or the day before for reassurance that the Greek crisis was being dealt with effectively, would have been sorely disappointed. More particularly, after a weekend of reassuring words from the IMF and Greek officials, Monday saw fresh signs that support for Greece from Germany is far from a done deal. In fairness, the signs that the road to approving the aid might prove a bumpy one have been apparent to all to see for months now.
So where does this leave Greece? Well the Christian Democratic Unionâ??s budget spokesman Norbert Barthle said that he wants creditor banks to accept a restructuring of their investments in Greek debt as well as a reduction on returns. Could this be the first real sign that a growing number of politicians within Germany now think that a restructuring of Greek debt should be part of the process? Although Christine Lagarde may have insisted yesterday that the possibility of restructuring Greek debt is â??off the table,â?? we are also aware that an unnamed European official quoted by the WSJ over the weekend talked about the â??inevitableâ?? restructuring of Greek debt. By the sounds of things it certainly sounds as though it is becoming more likely."
The periphery, then the center…cannot hold.