Meg Greene writes:
I have long thought that the troika would cut Greece loose and let it default and exit the eurozone once eurozone banks had been sufficiently firewalled. Perhaps this aggressive proposal by Germany is one of the unintended consequences of the ECB’s three year long term refinancing operation (LTRO). If eurozone banks have as much access to cheap, three-year ECB funding as their collateral allows, perhaps Germany and the troika have decided that eurozone banks can survive a Greek default. Greece is clearly insolvent and must leave the eurozone to eventually return to growth. The German proposal may have accelerated the inevitable.
I recall someone on Twitter noting that if Greek leaders turned fiscal sovereignty over to Brussels, the relevant parties would end up hanged for treason, or something like that. I’ll predict against that outcome. Angus adds comment. The general point here is that apparent progress also makes it easier for parts of the Eurozone to unravel. In this context what counts as “good news” or “bad news” can be quite tricky.