Germany refuses Greece an honourable surrender over austerity | Business | The Guardian
▻http://www.theguardian.com/business/economics-blog/2015/feb/19/greece-runs-up-the-austerity-white-flag-in-brussels
Wolfgang Schaeuble, Germany’s finance minister, immediately slapped Tsipras down. What Greece was proposing was unacceptable, Schaeuble said. Unless the Germans are bluffing, and there’s nothing to suggest that they are, it leaves Greece with a binary choice: abject surrender or going nuclear.
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“Tsipras has two big weaknesses. Firstly, Greece is suffering from capital flight and is dependent on emergency support from the ECB for its banks. The ECB has just increased its funding, but not by as much as Greece would have liked. The life support could be cut off at any time.
Secondly, and perhaps more significantly, Greece has failed to deploy its most potent weapon – a threat to leave the euro. For all the talk in Brussels and Berlin that the single currency could withstand a Greek departure, the threat of withdrawal would have put the frighteners on. Would the euro group really want to risk chaos, given the shaky state of the economy? No. Would Angela Merkel want to go down in history as the German chancellor responsible for rolling back more than half a century of European integration? Again, no.
So Tsipras should tough it out. He should reject the cosmetic concessions that will be offered and say that the deal on offer is not acceptable to the Greek people. Politically, this does not look much of a risk. If he accepts a Carthaginian peace he is finished.”