Schaeuble, the German Finance Minsiter, Wants Greece out of the Euro

Geithner, in his recently published memoirs, writes that Schauble, the German Federal Minister of Finance, wanted Greece out of the Eurozone from as long back as 2012 to teach others a lesson. Varoufakis repeats this in his op-ed piece in The Guardian, arguing that this is Schaeuble's way of “disciplining” France. Greece needs to be put to the sword, as an “example” to other members in the Eurozone.

We reproduce below two excerpts regarding Schaeuble's views. This would explain why Greece negotiations have been so one-sided and always with shifting goalposts. The most important member of the troika just does not want a resolution to the Greek crisis, but wants to use it to treat other members of the Eurozone the cost of an exit.

In a new book, “Stress Test: Reflections on Financial Crises,” published on Monday, the former US Treasury chief recalls a meeting with German Finance Minister Wolfgang Schaeuble on the North Sea island of Sylt in July 2012, during which the latter discussed the case in favor of a Grexit.

Image Courtesy: en.wikipedia.org

According to the book, Schaueble argued that several eurozone countries were in favor of Greece leaving the single currency and that this would allow Germany and others to create a firewall around the remaining members.

“I found his strategy frightening,” writes Geithner, adding that he subsequently informed US President Barack Obama upon his return to Washington, who in turn was “also deeply worried.”

http://www.ekathimerini.com/159913/article/ekathimerini/business/geithner-describes-alarm-at-schaeuble-plan-for-greek-euro-exit-in-new-book

The threat of Grexit has had a brief rollercoaster of a history. In 2010 it put the fear of God in financiers’ hearts and minds as their banks were replete with Greek debt. Even in 2012, when Germany’s finance minister, Wolfgang Schäuble, decided that Grexit’s costs were a worthwhile “investment” as a way of disciplining France et al, the prospect continued to scare the living daylights out of almost everyone else.

By the time Syriza won power last January, and as if to confirm our claim that the “bailouts” had nothing to do with rescuing Greece (and everything to do with ringfencing northern Europe), a large majority within the Eurogroup – under the tutelage of Schäuble – had adopted Grexit either as their preferred outcome or weapon of choice against our government.

Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.

Yanis Varoufakis, former Finance Minister, Greece

http://www.theguardian.com/commentisfree/2015/jul/10/germany-greek-pain-debt-relief-grexit