ECB cannot have it both ways on problem of Greek debt

The Schaeuble Doctrine eschews cutting deals, but it ignores the lessons of history at its peril, writes Ray Kinsella

The preliminary skirmishes are over. The extent of the division between, on the one hand, the new Greek government seeking to renegotiate its impossible debt burden and, on the other hand, Germany and the ECB, is now evident. Greece is at the very sharp end of the eurozone’s ‘austerity’ doctrine — while Germany and the ECB are its foremost advocates.

The new Greek finance minister, Yanis Vardoulakis, met German counterpart Wolfgang Schaeuble and highlighted the scale of the problems confronting Greece’s broken-back economy — with unemployment at 25%, 50% youth unemployment and a haemorrhage of its most employable young people. He pointed out that “too much time, hopes, lives” had been wasted by Greece’s troika-imposed austerity programme. They need a write-down, not least to deliver on their commitment not to exit the eurozone.