Last week’s decision by leaders of the eurozone – that deficit-ridden Greece must exhaust all financing possibilities from the markets and the International Monetary Fund before it asks for a European Union rescue – has occasioned more talk about Germany than about Greece. This is natural. At the beginning of the week, Angela Merkel, the German chancellor, appeared isolated in opposing a European bail-out.
Almost everyone had a reason for permitting Greece to tap European funds: the European Central Bank because Greece’s failure is a family embarrassment best not talked about outside the house; France because the IMF is run by Dominique Strauss-Kahn, a possible rival for Nicolas Sarkozy in the presidential elections of 2012; and other countries because the lion’s share of the burden was likely to fall on Germany. And yet the German view of the matter (largely) prevailed. Even if Greece comes back empty-handed from the markets, any rescue will still require a unanimous vote of the eurozone countries.
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