GREEK AID TRANCHE: With five days to go, the Berlin Games continue.

European politicians continue to fritter away our faith in democracy

Jens Weidmann of the German Bundesbank is questioning how impartial the Troika’s FinMin conclusions on Greek debt might be…. given that politicians have “already decided to continue funding Athens”, as he puts it.
I find myself having equivocal feelings about Herr Weidmann. While on the one hand I think he represents ‘sensible’ EU and sane Germany, on the other I think he runs fast and loose with the truth to strengthen his case. Anyone who takes this Brechtian route when dealing with a moral dilemma is well worthy of our suspicion.
Weidmann was quoted in eKathimerini yesterday as asking “How can you objectively assess the completion of the programme if you are too afraid of the consequences of a negative conclusion?” Unless Jens has been deaf and blind to everything online for the last ten days, he must surely be aware of the infinite leaks from the IMF, which suggest (with no room for doubt) that Greece is going to miss all its targets by miles. Given that the Lagardians are one third of the Troika, one might have expected him to mention that.

Perhaps to Jens Weidmann’s discomfort, in the last forty eight hours a former International Monetary Fund official, Arvind Virmani, has again asserted that Greece’s debt problem cannot be solved without a restructuring. “It has been my view since early 2010 that Greek debt cannot be made sustainable without a drastic debt write-off,” he said, “The greater the delay, the more the cost to remaining creditors, and the Greek public. The stronger euro countries have refused to acknowledge this fact, even after the IMF started, perhaps a little reluctantly, to recognise it.”
In short, Weidmann is happy to accuse the Troika, but unwilling to recognise the folly of NordEuropa (and the bondholder community) in saying “Nein, a thousand times nein” to debt forgiveness and/or default.
Veteran Sloggers will know that my most valued diplomatic contact in Paris has held a consistent view in recent years when it comes to dealing with Germany: “You never quite know whether you are listening to Frankfurt or Berlin”. (And of course, which bit of Frankfurt). But the Merkel Government continues to play these games, and at times the exact reasons why are hard to determine.
My view remains what it has been for over a year now: despite all the Donner und Blitzen from the Bundesbank, neither Germany nor France can afford to have Greece and Spain on tilt at the same time.
November 6th is now behind us, and once again we appear to be going down to the wire. But we aren’t really: a new staging post lies ahead, because Angela Merkel faces an election campaign in the Autumn of 2013. She “will not be looking for a comprehensive solution for Greece before the elections in her country” say European sources.
The thing about purgatory is, it’s theoretically infinite.
http://hat4uk.wordpress.com/