WIKILEAKS - Merkel Did Not Want To Help Greece Prior To Its Entry To IMF

photo by Taxalia

According to the latest Wikileaks cable as presented by the ETHNOS newspaper today Chancellor Angela Merkel's government welcomed the decision taken by an informal summit in Brussels in 2010 (prior to Greece’s entry to the IMF) which did not to provide financial assistance, for the moment, to cash-strapped Greece. The cable says that “German officials believe a bailout is not needed at this time and that extending a lifeline to Greece would have carried too many risks. One major fear in Germany is that "saving" Greece would lead to other needy Eurozone members expecting the same treatment. Another concern is that extending an explicit guarantee for Greece could weigh on Germany's own good standing in the markets, ultimately raising its borrowing costs. While German government officials do not totally rile out an IMF program for Greece if push comes to shove, most consider this eventuality highly unlikely, especially in light of the European Central Bank's strong opposition. In fact, the German government, the ECV and private German economists are downplaying the seriousness of Greece's predicament and its potential impact on stability of the Euro. They agree, however, that the crisis could have longer-term consequences for EU institutions and how they interact with member states that stray off course.”


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