Who is Merkel’s audience?
27/01/2012 § 2 Comments
Chancellor Merkel suggested yesterday that Greece might not survive in the euro. Have her staff been reading the blogosphere? Have they seen what many have seen, that negotiations seem to be on the road to nowhere? Perhaps, perhaps.
But I wondered, to whom is she speaking? In one sense, the substance of her comments contained nothing new. The news is that she said it. Why, and why now?
Here are some possible audiences:
- Investors: Merkel is saying, don’t judge the euro by Greece. Yes, we have this gangrenous lower limb, but we will amputate if necessary, and it isn’t very big, anyway.
- Greece: Merkel is the resolute cop, who arrives at the scene where Greece is holding the euro hostage. The cop says, ‘I’m not afraid to shoot the hostage.’ Greece drops the hostage and capitulates.
- Institute of International Finance: Maybe Merkel is a poker player? Is she calling the bluff of Greek bond holders? ‘You’ve been talking a pretty big game there. Now it’s time to show yer cards.’
I’m not sure her comments change anything on the ground, but it is interesting to hear her make them.