Word: merkel
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Dates: during 2010-2019
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...been a standard theme of commentary of late to say that Angela Merkel, Germany's Chancellor, could be the leader of Europe - but doesn't want the job. When Merkel took on much of the E.U., above all French President Nicolas Sarkozy, with her lonely, stubborn and ultimately victorious campaign against a Greek bailout, she became "Madame Non" in France, and Public Enemy No. 1 in Greece. At home, Joschka Fischer, the Foreign Minister of the government she ousted in 2005, gave her an F for an "extraordinary foreign policy disaster." Germany, he surmised, was no longer the "motor...
This is where Merkel stomped on the brake. Greece will not get a single cent from the E.U., except in the direst of straits, and then only as loans. As Voltaire famously preached, harsh retribution serves not only to punish the culprit, but also "encourages the others" to remain virtuous. Surely, if Greece had gotten the handout, other PIIGS might have merrily continued in their extravagant ways. (Read: "Germany: Tensions...
...many Germans, Merkel is right not to put their country's money on the table too soon, as it could lift the pressure for reform in Greece. "That would risk setting a precedent of profligate countries taking advantages of the others," says Silvio Peruzzo, a London-based analyst at the Royal Bank of Scotland. "If you set up a bad incentive, then you undermine the credibility of the euro zone. In that sense, the Germans are much more forward-looking." (See pictures of the dangers of printing money in Germany...
...even if Merkel says Greece is in no immediate danger, there are doubts about whether it can survive for much longer without outside financial help. Simon Tilford, chief economist at the London-based Center for European Reform think tank, says Merkel's brinkmanship is understandable given the political risks of Germany's conceding too soon but that she cannot hold out indefinitely. "It is implausible that Greece could get through the rest of this year unaided," he says. "Ultimately, the Germans will put something on the table. They will always defend the stability of the euro...
...Merkel blinks and that happens, Papandreou's audacious gamble will pay off. But it could be a long and nervous wait until she finally shows her cards...