In an interesting history, today's WSJ points to a closed-door meeting in Washington on April 14th of this year as the moment that the attempts to 'save' Europe began to unravel. The player at the center of the debacle - one Dominique Strauss-Kahn - was pressing for more 'help' from Europe or else the IMF would not deliver more magic-money to the Greeks. The ultimatum drove a wedge between many competing camps over who should be on the hook for more or less of the money required to save this tiny sovereign. Critically, as we have pointed out again and again, it is not (in this case) size that matters, but the precedent that a nation leaving the socialist construct of the Euro 'breaks' the union and the WSJ weaves a torrid tale of this increasing tension and DSK's catalytic impact and timely 'dismissal' from the process. Furthermore, the clear 'dithering' they describe among these so-called leaders offers insights into what we can expect going forward as a new fiscal compact (same as the old one) begins to emerge with mid-March hard Greek deadlines looming fast.
At a closed-door meeting in Washington on April 14, Europe's effort to contain its debt crisis began to unravel.
Inside the French ambassador's 19-bedroom mansion, finance ministers and central bankers from the world's largest economies heard Dominique Strauss-Kahn, then-head of the International Monetary Fund, deliver an ultimatum.
Greece, the country that triggered the euro-zone debt crisis, would need a much bigger bailout than planned, Mr. Strauss-Kahn said. Unless Europe coughed up extra cash, the IMF, which a year earlier had agreed to share the burden with European countries, wouldn't release any more aid for Athens.
It was to be Europe's fateful spring. A Wall Street Journal investigation, based on more than two dozen interviews with euro-zone policy makers, revealed how the currency union floundered in indecision—failing to address either the immediate concerns of investors or the fundamental weaknesses undermining the euro. The consequence was that a crisis in a few small economies turned into a threat to the survival of Europe's common currency and a menace to the global economy.
[as we know by now] - The April meeting ended inconclusively.