If Greece falls, no one wants their prints on the murder weapon

Monday, 27 April 2015 00:00 - - {{hitsCtrl.values.hits}}

A European Union flag (R) and a Greek national flag flutter atop a building in central Athens 28 March BRUSSELS (Reuters): We’re going bust. No, you’re not. You’re strangling us. No we’re not. You owe us for World War Two. We gave already. The game of chicken between Greece and its international creditors is turning into a vicious blame game as Athens lurches closer to bankruptcy with no cash-for-reform agreement in sight. Europe’s political leaders and central bankers and Greek politicians agree on only one thing if Greece goes down, they don’t want their fingerprints on the murder weapon. If Athens runs out of cash and defaults in the coming weeks, as seems increasingly possible, no one wants to be accused of having pushed it over the edge or failed to try to save it. Greece’s leftist government has already identified its culprit of choice - Germany, Europe’s main paymaster, accused of having inflicted toxic austerity policies on Greeks, causing a humanitarian crisis. Euro zone governments are preparing the ground to blame the novice government of Prime Minister Alexis Tsipras for having blustered, obstructed, failed to meet commitments and evaded hard choices while Athens burned. “We are doing everything we can to save Greece from itself, but in the end, it’s up to them,” is the message pouring out of Berlin, Brussels and IMF headquarters in Washington. Tsipras and outspoken Finance Minister Yanis Varoufakis tried at first to mount a coalition against Berlin, touring France, Italy, Britain, Brussels and media studios after their election. They found no allies outside the media. Tsipras revived demands for reparations for the Nazi German occupation of Greece in 1941-44, which his government put at 279 billion euros ($303.5 billion) - more than its 240 billion euro bailout from the euro zone and the International Monetary Fund. Berlin responded that it had already compensated victims and a 1990 agreement with the four victorious World War Two powers on German unification had put an end to war claims. German Chancellor Angela Merkel has been careful to express goodwill and tried to build a relationship of trust with Tsipras while insisting Greece must meet its lenders’ reform conditions, which include fiercely resisted pension cuts and labor reforms. “Everything must be done to prevent Greece running out of money, she said after talks with Tsipras last week. On the German side, we are prepared to provide all the support that is asked of us. But of course reforms must be done,” she added. Investors briefly hoped her pledge might be a turning point, similar to European Central Bank President Mario Draghi’s 2012 vow to do whatever it takes to preserve the euro. But Merkel’s comments could also be interpreted as an exercise in pre-emptive blame avoidance. Unlike Draghi, she did not say who should do everything to stop Greece going bust. Her finance minister, Wolfgang Schaeuble, is openly sceptical of whether Athens can avoid crashing out of the euro zone. Angry euro zone finance ministers made clear they were far from a deal with Greece, rejected Varoufakis’ plea for early cash in return for partial reform and told him they would not even discuss longer-term funding and debt relief until Greece signed and implemented a full reform plan. While Greece’s leaders insist Europe must heed and respect the democratic will of the Greek people, its creditors reply that they too have democratic mandates from their voters.