Well, it looks like they’re really going to have something to discuss this Thursday and Friday when the European Union meets to talk about what the group can and can not do to help Greece with their little debt problem. This story at Reuters makes clear that the Germans are open to offering some assistance, but only as a last resort and only if the IMF involved.
A senior German official spelled out Berlin’s conditions for any aid mechanism ahead of an EU summit starting on Thursday:
- Greece would have to be unable to access credit markets;
- The IMF would have to contribute to any rescue;
- European Union states would have to agree to negotiate “additional instruments” to enforce budget discipline, beyond existing rules that failed to prevent Athens running up huge debts and deficits that have shaken the euro zone.
“The condition for action, as a last resort, is that Greece’s financing on the capital markets is exhausted,” the official said.
“Furthermore, it would be necessary for the International Monetary Fund to provide a substantial contribution,” he said, stressing there will be no decision on actual aid at the summit.
While the Germans hate the idea of a bailout, the rest of Europe hates the idea that the Washington-based IMF might have to come to the rescue, all of which makes the “polite default” mentioned by Martin Feldstein noted here earlier today that more likely.
The European Union summit in Brussels that intends to somehow address the issue that has, once again, reached crisis levels will not begin until Thursday, so it looks like the Germans have three days to figure that out.
As for the graphic above, like much of the humor over the last year or two, it would be a lot funnier if it weren’t so close to the truth.
Now, the little girl in the photo above probably doesn’t understand the meaning of the sign she’s holding but, in another fifteen years she likely will.
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