“A Grexit would be traumatic enough that it would help scare the rest of Europe into giving up more sovereignty to a stronger banking and fiscal union. The argument was that letting Greece burn would make it easier to build a stronger Europe with a more credible firewall.”

Germany’s main parties have come one step closer to building a coalition, agreeing on several points including raising the retirement age and a policy on Turkey, but they still must overcome the hurdle of plugging a huge budget shortfall.