Ambrose Evans-Pritchard’s latest report on the Greek debt crisis in today’s Telegraph is even more alarmist than usual and, if you’re familiar with his writing, you’ll know that’s really saying something.

German and Dutch leaders have concluded in the nick of time that they cannot defy the will of their sovereign parliaments by propping up a country that lied about its deficits, or risk court defeats by breaching the no-bail-out clause in Article 125 of the EU Treaties.

Chancellor Angela Merkel has halted at the Rubicon. So has Dutch premier Jan Peter Balkenende, as well he might in charge of a broken government facing elections in a country where far-right leader Geert Wilders is the second political force, and where the Tweede Kamer has categorically blocked loans for Greece.

The failure of EU leaders to cobble together a plausible bail-out – if that is what occurs at this week’s Brussels summit – is a ‘game-changer’ in market parlance. Eurogroup chair Jean-Claude Juncker said last month that such an outcome would shatter the credibility of monetary union. It certainly shatters many assumptions.

According to the latest reports, Merkel is adamant about not discussing a Greek bailout at this week’s EU meeting and this comes on the same day that the Greek government announced its economy is now contracting at an even faster pace than previously believed.

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