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Germany and Greece should look to Goethe to resolve their standoff

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A statue of Goethe.

By Paul Mason

 On a quiet street in central Athens stands the bronze, modernist facade of the Goethe Institut, which has been teaching German and spreading enlightenment about German culture since 1952. Last week, the Greek government threatened to seize the building, together with holiday homes and other German assets. Greece is claiming €341bn (£240bn) in second world war reparations from Germany – and if the government does not confiscate the Goethe Institut, there are numerous people in Athens ready to do it “from below”.

With Germany on the brink of vetoing any further debt forgiveness for Greece, the logic of angering Berlin more does not look obvious. To the uninitiated, the two countries’ animosity towards each other can seem inexplicable. Yet fascination with Greece is deep in the German psyche. And the way out of the standoff may lie in the example of Johann Wolfgang von Goethe himself: Germany’s great poet and statesman underwent his own U-turn on the issue of Greece, under the pressure of geopolitical events very similar to today’s. More

Spain Said to Lead EU Push to Force Terms on Greece

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As euro-region finance ministers turned the screw on Greece in Friday’s talks, the group’s usual enforcer, Wolfgang Schaeuble of Germany, was eclipsed by Spain’s Luis de Guindos, according to two people with direct knowledge of the talks.

De Guindos took the toughest line with Greek Finance Minister Yanis Varoufakis as the bloc forced him to adhere to the terms of the country’s existing bailout to retain access to official financing, the people said, asking not to be named because the conversations were private. When the group rejected Schaeuble’s call for a Tuesday meeting to scrutinize Greece’s plans to meet those conditions, De Guindos insisted, winning agreement for a teleconference, they said. More

Greece and the EU: a question of trust

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Της Frances Coppola

I have been mulling over the terms of the agreement between Greece and the Eurogoup. Initially, I thought that Greece had ended up with an appalling deal, getting almost none of its aims and losing control of EFSF funding for its banks. The retention of future primary surplus targets under the November 2012 agreement – only the target for this year is under review – seemed particularly harsh.

But then I listened to Pierre Moscovici explaining the thinking behind the deal, and suddenly the penny dropped. We’ve all been missing the point. Holger Schmieding of Berenberg Bank was on the right lines – he commented recently that the real problem in the Greek negotiations was that trust had broken down. Indeed it has. But not recently. Trust in Greece broke down a long time ago.

The most obvious breakdown in trust happened in 2010 when the extent of Greece’s indebtedness was revealed – and the lengths to which it had gone to conceal its true position. With the help of Goldman Sachs, it had lied about its finances to gain admission to the Euro in 2001, and had been living a lie ever since.   More