Germany Plans for Possible Greek Default

Spiegel
September 12, 2011

The rest of the euro zone is losing patience with Greece. German Finance Minister Wolfgang Schäuble is no longer convinced that Athens can be saved from bankruptcy. His experts at the Finance Ministry have been working on scenarios exploring what would happen if Greece left the euro zone. By SPIEGEL Staff.

Herman Van Rompuy is an influential man in Europe. He is already president of the European Council, the assembly of the European Union's heads of state and government. Soon he will also serve as the chief representative of the euro zone, if all goes according to plan.

Van Rompuy's new role as "Mr. Euro" is a highly prestigious position. German Chancellor Angela Merkel thinks highly of the unassuming Belgian politician, who conceals a propensity for toughness and efficiency behind his seemingly humble appearance.

One of Merkel's European counterparts felt the brunt of Van Rompuy's unconventional charm last Monday, when he took Greek Prime Minister Georgios Papandreou to task in a telephone conversation. The representatives of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), known as the troika, had left the crisis-ridden country in protest a few days earlier, because the Greek government had, once again, circumvented agreements it had made.

We have a problem, Van Rompuy said at the beginning of the conversation. Unless Greece delivers, he told Papandreou, the next tranche of aid would not be paid. Papandreou understood immediately: Van Rompuy was telling him the Europeans were on the verge of cutting off funding to his country.

A lot of people in Europe are displeased with Greece at the moment. "We cannot be satisfied with the latest reports from Greece," an irritated Chancellor Merkel said last week. "The troika mission must be continued and brought to a positive conclusion," said German Minister Wolfgang Schäuble. Even Euro Group President Jean-Claude Juncker, normally not one to engage in fearmongering, took Greece's prime minister to task on the phone. "Things are not moving at the right pace in Greece," he said after the conversation. "There are no results."

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