A lot of people here seem to have no clue about what's happening in Greece.....

[markpkessinger]

71. Sorry, no. There is fault aplenty to go around . . .

And yes, a debt reduction puts the European Central Bank in a difficult spot vis-a-vis other southern European countries. (That's the problem with having a unified currency absent fiscal or political unity.) But Greece has already borne massive cuts in government services and reduction in wage and pension payments, and an unemployment rate of 25%. The public sector, prior to the crisis, constituted 40% of the Greek economy, and the austerity measures to date have served to further contract Greece's economy. The notion that it is in any way reasonable to expect the people of Greece to pay still more for their previous leaders' sins than they already have is positively delusional, as is the idea that further austerity will serve any purpose whatsoever other than to further cripple Greece's ability to pay at all.

And Merkel, for her part, has complicated her own position by peddling an outrageous narrative of "hard-working Germans" who have been "carrying lazy Greeks." And the German people (never known to be reluctant about believing in their own superiority, be it ethnic or moral) have bought into it. Thus Merkel has placed herself in an impossible position with her own voters, who will be self-righteously furious if she cuts any kind of reasonable deal. And, As Richard Wolff pointed out in his Democracy Now interview, this narrative is very much reminiscent of Romney's infamous "47%" remarks. Only I would argue it is actually much worse than that, because it sets up competing nationalisms.

Merkel is playing with fire here. No, make that volatile explosives. Syriza's recent electoral success notwithstanding, there remains a hard line fascist element in Greece, and in other countries as well. Wolff points out that it is no coincidence that Marie LePen, leader of the far right Front National in France, has announced her solidarity with Greece's left-wing party, Syriza. Why? Because she sees what is coming: a major cross-national class conflict in the form of a virulent anti-capitalist backlash, and thus she is positioning her far-right party to be able to swoop in and exploit the crisis.

If any country should understand the dangers of pushing a people to the finical breaking point, it should be Germany, whose own history vividly illustrates the dangers. Merkel and the German bankers need to pull their heads out of their asses and begin to understand the stakes here.