FXStreet (Guatemala) – German Finance Minister Schaeuble claims that he raised the possibility of a Greek exit to push for an alternative, and he did so with backing of the Merkel government.
Key Quotes:
“He used the threat of a violating the “irreversible clause” of the EMU Treaty as a cudgel to beat Greek Prime Minister Tsipras into submission.
It appeared to work. Tsipras has not only agreed to all the terms he previously called “blackmail”, but he agreed to essentially implement all the earlier agreements since the crisis began and more.
There is a powerful argument that believes that Germany crossed an important line. As Wolfgang Manchau wrote in the Financial Times, “They have destroyed the eurozone as we know it and demolished the idea of a monetary union as a step towards a democratic political union…They demoted the eurozone into a toxic fixed exchange-rate system, with a shared single currency, run in the interests of Germany, held together by the threat of absolute destitution for those who challenge the prevailing order.”
The conclusion of this argument that its vindictiveness toward Greece, Germany has asphyxiated the future of the European Project. It becomes a German sphere of interest, dictated by its narrow self-interest. Rather than leading to greater integration over time, by threatening a Greek exit the from the irrevocable monetary union, it has rendered EMU into a rigid form of the ERM. It turns the union into an economic utilitarian exercise.
Manchau and others argue that on these more narrow terms, a common currency does not work for many of its members. He specifically cites Italy and Finland, but others could make the case for many other members as well.”
(Market News Provided by FXstreet)