Greece's lingering death

The news that Greece is failing badly to meet the targets set for it to draw down the next tranche of financial support was not unexpected. As the country lurches into an even deeper recession, brought on in part by the austerity measures, the only answer from the IMF, European Union and European Central Bank 'troika' is 'no more concessions'.  An impossible position for Greece, unable as it is to let the exchange rate fall to make it more competitive.

See: http://www.telegraph.co.uk/finance/financialcrisis/8805452/US-markets-hit-year-low-as-Greece-is-warned-it-will-have-no-more-concessions.html

But then: http://www.telegraph.co.uk/finance/financialcrisis/8805446/Greece-default-not-an-option-says-Jean-Claude-Juncker.html

Apparently Eurozone finance ministers have discussed plans to increase the "firepower" of the €440bn European Financial Stability Facility (EFSF) euro-wide bail-out fund after pressure from the US, Britain and G20 to leverage it to €2 trillion.

The problem is that such a leverage proposal will test German resolve.  The German parliament and courts could yet in effect veto such a move.  The issue will then move on to the future of the EU.  Will it lead to greater fiscal and political union?  Outside of the European Parliament and the commissars of Brussels, led by the Great Dictator, Barroso, there is little enthusiasm for greater integration.  All eyes will now be fixed on Germany, and in particular the next moves of the German Finance Minister Wolfgang Schäuble.

See: http://www.spiegel.de/international/europe/0,1518,789661,00.html

Desperate times.

Postscript:  http://www.spiegel.de/international/europe/0,1518,789804,00.html