How Greece Pushed Europe Creditors to the Edge
Comment of the Day

March 31 2015

Commentary by David Fuller

How Greece Pushed Europe Creditors to the Edge

But the military honours did nothing to cow Mr Tsipras from repeating a demand that has catalysed the breakdown in trust between the debtor state and Europe's largest creditor: that Germany revisits the episode of its former might and compensate his country for crimes committed by the Third Reich.

In front of the world's media, the Greek premier stood by Ms Merkel and maintained his government would pursue the "moral" question of Second World War reparations.

Ms Merkel however was categorical in her refusal to re-open old wounds.

It is an issue which has fanned the flames of a protracted and increasingly ugly series of threats and counter-threats that have dogged talks between the two sides.

Having agreed in principle to extend Greece's bail-out programme on February 20, Athens progress on meetings its reforms-for-cash deal has stalled.

Greece's paymasters are demanding the fast implementation of legislation to release the bail-out cash. They have yet to see much in the way of action.

Sketchy plans to tackle tax evasion using undercover tourists and students as tax inspectors drew derision from eurozone officials.

To add insult to perceived injury, the only concrete measures to have been put before the Greek parliament are a raft of "anti-poverty" programmes designed to tackle the country's humanitarian crisis.

Steps towards privatising key national assets, revamping labour laws, and cutting generous state pensions have remained conspicuously absent.

The hiatus has exasperated Greece's creditors.

"The new government has gambled away a lot of trust," was the verdict of Germany's hawkish Bundesbank chief Jens Weidmann.

The procrastination on the part of Athens has also been accompanied with rhetoric to release jihadists into Europe, seize German assets in return for crimes carried out by the Nazis, and overtures towards an axis of pariah states including Russia and Iran.

David Fuller's view

This has turned very ugly, as I have long feared.  Angela Merkel and Germany deserve credit for restraint and Greece has understandably been losing sympathy and EU allies with this rhetoric.  The EU is not a Federal State, so not every country will be able or willing to stay within the single currency.   

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