The Greek financial tragedy seemed set to enter the end game last week, when the troika representing big official lenders (the EU, ECB and IMF) was close to abandoning the next tranche of official loans to the country. Without these official loans, a disorderly default would have been inevitable within a month, and the departure of Greece from the euro, if not from the EU itself, would have been on the agenda.
Germany was reported to be examining these radical options at the weekend. However, having looked over the precipice, Angela Merkel, German chancellor, seems to have recoiled from them, for now. We will learn more in the next few days, but yesterday she hinted that she would still prefer a delayed, “orderly” Greek default, rather than an immediate and disorderly one. Unfortunately, neither option looks very appealing. Read more