Rocks, Hard Places

by Andrew Stuttaford

Greece has reached the latest of many last ditches this weekend.

The Financial Times reports:

Lucas Papademos, the Greek premier, failed to make party leaders accept harsh terms in return for a second €130bn bail-out, pushing Athens closer to a disorderly default as early as next month. Greek television reported that Mr Papademos has set a deadline of midday on Monday for the three leaders to let him know whether they agree in principle with the proposed austerity measures, before he meets them again later in the day.

After five hours of discussions, the three leaders of Greece’s national unity government had not accepted demands by international lenders for immediate deep spending cuts and labour market reforms as part of a new medium-term package.

Mr Papademos said the political leaders had agreed on some “basic issues”, including making spending cuts this year of 1.5 percentage points of gross domestic product, or about €3bn, according to a statement from his office.

George Karatzaferis, the head of the small rightwing Laos (People’s) party said as he left the prime minister’s office, that he expected the talks to continue on Monday. There was no immediate announcement by Mr Papademos.

It was clear however that the talks had reached a dangerous deadlock. “They’re asking for more recession than the country can take,” said Antonis Samaras, leader of the centre-right New Democracy party as he left the meeting.

The overspending, corruption and dysfunction of the Greek state are hard to deny.  But so, almost certainly, too is the truth of what Samaras had to say.

Meanwhile Reuters reports on the views of German voters infuriated by the cost of bailing out a country in which they have no trust in order to prop up a currency which they never wanted.

And no, they are not happy:

The majority of Germans feel the euro currency bloc would be better off if debt-crippled Greece left it, a poll published in mass-selling newspaper Bild am Sonntag showed on Sunday.

The Emnid poll said 53 percent of Germans surveyed thought Greece should return to its former currency, the drachma, while only 34 percent felt it should keep the euro…The Emnid poll said 80 percent of Germans surveyed opposes releasing the rescue package unless Greece implements the reforms.

Yet (understandable) fear of what might happen to Germany if chunks start to fall off the Eurozone still keeps its voters in line. The Spectator’s Andrew Gimson recently visited some bars in Stuttgart (tough assignment) and reported on what he found:

I have to admit that while the Germans are deeply perturbed by the euro’s difficulties, they are not in a state of pre-revolutionary fury. Their mentality is that of the crew of a ship who watch with growing concern as they find themselves steered into perilous waters. It does not occur to them to seize control of the ship and try to turn it round: that would only make matters worse. Instead they feel it is more important than ever for everyone to do his duty and co-operate. They see the waves beating on the rocks, and hope that somehow Captain Merkel will be able to find a way through.

Good luck with that.