Greece and the euro zone’s worst-case scenario
A German ‘yes’ vote may still not avert the worst
By Steve Goldstein
Sept. 28, 2011,
WASHINGTON (MarketWatch) — Germans know a thing or too about kicking, whether it’s the seven times they’ve been to the World Cup soccer finals or the umpteen times they’ve kicked the can down the road on resolving the Greek debt crisis.
So on Thursday, the German parliament may again take cleats to the Greek problem by voting in favor of changes to the European Financial Stability Facility rescue fund. “In fact,” said Jennifer McKeown, senior European economist at Capital Economics, “it almost certainly will.”
But what if the German parliament didn’t? After all, this is the country where the Pirate Party recently scored well in an election. It’s where aid to Greece makes the front pages of the tabloids in a why-don’t-we-seize-some-islands kind of way. It’s where Greeks, not to mention the populaces of other Mediterranean nations, are characterized in the crudest stereotypes.
So, if Germany says nein ?
“It would be a bit of a disaster,” McKeown said. “When Slovakia didn’t agree to previous changes in the EFSF, they just didn’t contribute, but that’s not an option for Germany. There would have to be talks about how to readjust the EFSF so that it would suit [Germany].”