Greece is an absolute mess and Tsipras’ plan to keep Greece in the Eurozone while getting a big debt haircut was a complete failure.
If anything can be said to have been accomplished by Tsipras’ missteps and poor execution of his electoral mandate, it’s that he has managed to create some tension between EU paymaster and leader Germany and France, a country that understands it is in terrible economic shape and will need lots of flexibility and charity from the EU and ECB if it is to avoid its own economic collapse in the near future.
Via Sputnik News…
Greece has become the catalyst of a new dispute between the two European giants, deepening the recently emerged split within the European Union, DWN reported.
So far, the EU has always benefited from the fact that Germany and France pursued a common line at a crucial moment. But after the recent EU summit, where Wolfgang Schäuble presented the expulsion of Greece from the Eurozone as a possible option, the situation has fundamentally changed.
The French elites started to express their criticism of German policy and even suggested that Germany, not Greece, should withdraw from the monetary union.
The conflict is likely to sharpen during negotiations about the new loan program for Greece. According to DWN, Greek Prime Minister Alexis Tsipras can count on the support of French President Francois Hollande.
Both leaders had agreed that the talks should be finalized by the end of August. Thus, they are interested in a quick conclusion of negotiations and are likely to find the required compromise to accelerate the process.
However, German officials doubt the possibility of reaching a consensus in a short time. Thus, German Finance Minister Wolfgang Schäuble told the newspaper Bild that he doubts an early agreement with Greece is likely and expects further bridge financing.
According to DWN, Schäuble is convinced that it would be better for Greece to leave the Eurozone and to obtain loans for reconstruction outside the monetary union.
The Greek government and international creditors are currently negotiating a third loan package of 86 billion euros. Should the negotiations fail, Greece may face a state of bankruptcy.