US defends unruly Greece as Europe steps up ‘Grexit’ threats

Germany’s vice-chancellor said “zero chances” that his country will respond to Greek demand for Nazi war reparations

Europe’s creditor powers have reacted with fury as Greece presses ahead with plans to smash its EU-IMF Troika programme and demand war reparations for Nazi occupation, raising the risk of a traumatic rupture with Athens by the end of the month.

Wolfgang Schauble, Germany’s finance minister, said there could be no bridging agreement for the radical Syriza government, insisting that it must stick rigidly to the terms of Greece’s €245bn bail-out package and secure a negotiated extension, or face the consequences. “If they want to deal with us, they need a programme,” he said.

He issued a clear warning to the new Greek premier Alexis Tsipras that his country will be left penniless in a hostile world. “I don’t know how financial markets will handle it, but maybe he knows better,” he said.

Continue reading

Germany’s top institutes push ‘Grexit’ plans as showdown escalates

A top German body has called for a clear mechanism to force Greece out of the euro if the left-wing Syriza government repudiates the terms of the country’s €245bn rescue.

“Financial support must be cut off if Greece does not comply with its reform commitments,” said the Institute of German Economic Research (IW). “If Greece is going to take a tough line, then Europe will take a tough line as well.”

IW is the second German institute in two days to issue a blunt warning to the new Greek premier, Alexis Tsipras, who has vowed to halt debt payments and reverse austerity measures imposed by the EU-IMF Troika.

Continue reading