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Monday, May 11, 2015 1:12 AM

Merkel's Own Party Ready to Give Up on Greece; Another Week of Deadlines; Reflections on Can Kicking

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German Chancellor Angela Merkel is increasingly isolated in her stance on Greece.

Growing Pressure From Within the ranks of her own party bloc to give up on Greece for the sake of the euro.

Members of Merkel’s Christian Democratic bloc are openly challenging her stance of keeping Europe’s most-indebted country in the 19-nation currency region. Even some officials in the Finance Ministry are leaning toward the conclusion that the euro area would be better off without Greece, two people familiar with the matter said.

“The euro would be strengthened if Greece left,” Alexander Radwan, a Merkel-affiliated lawmaker who voted for granting Greece a temporary extension of its bailout in February, said in an interview. “The other countries could then move closer together and apply the rules more strictly.”

Finance Minister Wolfgang Schaeuble, a prominent German advocate of European unity for decades, has given plenty of signs of exasperation with Greece since Tsipras and Finance Minister Yanis Varoufakis took office in January on an anti-austerity platform.

He told an Austrian television interviewer on March 12 that he could envisage a Greek exit from 19-nation currency. On a panel in Berlin the next week, he accused Greek authorities of lying to voters by failing to tell Greeks that they “lived way above their means” for decades.

As talks between Greece and its creditors drag on, the view that the euro would be stronger without Greece is gaining ground in Merkel’s Christian Democratic-led bloc, according to two lawmakers. They asked not to be identified because they don’t want to publicly challenge Merkel.

“Having its own currency could help Greece get back on its feet,” Hans-Peter Friedrich, one of 29 lawmakers from Merkel’s bloc who voted against extending Greece’s aid program, said in an e-mailed answer to questions.
Another Week of Deadlines

Bloomberg reports Greece Readies for Another Week of Deadlines.
Warnings of an accidental default loom over debt-swamped Greece as Prime Minister Alexis Tsipras’ anti-austerity government heads for another confrontation with an increasingly testy German-led bloc of creditors.

Greece needs at least a symbolic show of progress at Monday’s meeting of euro-area finance ministers in Brussels to persuade the European Central Bank to keep emergency funds flowing to Greek banks at the current pace. The next hurdle comes just a day later, when Greece has to pay about 750 million euros ($840 million) to the International Monetary Fund.

“Experience elsewhere in the world has shown that a country can suddenly become unable to pay its bills,” German Finance Minister Wolfgang Schaeuble said in an interview with Frankfurter Allgemeine Sonntagszeitung published Saturday. Schaeuble said if Greece is forced out of the euro “it won’t be because of us.”

An accord “will surely not be reached at the Eurogroup meeting on Monday,” Dutch Finance Minister Jeroen Dijsselbloem, the meeting’s chairman, told Italy’s Corriere della Sera newspaper. “We will need more time, but I don’t know how much.” The meeting starts at 3 p.m.

Whether Greece yields before the northern creditor governments’ patience snaps is an open question.
Inevitable Taking Forever

The inevitable default is damn near taking forever. Even if all the parties come to some sort of agreement for June, Greece is going to need a third bailout and the whole process starts over.

This time though, everyone needs to seal the deal on not one but two agreements in a very short period of time.

Why has this taken forever?

Because Merkel's position appears to be "not on my watch", and no one in Greece wants to take the blame. So everyone pretends that some sort of lasting solution is possible.

Can kicking can only last as long as there is a can to kick. This can is nearly rusted away.

Mike "Mish" Shedlock

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