With nothing but mute silence out of Germany in the aftermath of last night's "historic" Greek vote, the EURUSD is getting nervous trading down to just above 1.3200 minutes ago, well below the level reached last night following the passage in the Greek parliament of the vote with 199 out of 300 votes. As such, everyone is starved for some clues of what Merkel and Germany thinks at this point - will they simply leave Greece to flounder by demanding even more "reality" and implementation of measures from the first bailout - something Greece obviously can not do? Or will Germany relent for at least one more payment (of €210 billion). We don't know, at least not yet. But the following Spiegel interview with German Foreign Minister Guido Westerwelle may provide some insight. The key part: "Q. The second aid package will presumably be more expensive than anticipated, partly because the Greeks haven't kept their promises. How much longer will the German public put up with this?...Westerwelle: It's undoubtedly a moment of truth for Greece. If a sustainable and correct course is set in Athens now, Greece can expect our support -- but only then. There will be no more advance payments. Only actions count now." Like we said, hardly the ringing endorsement people expect. Then there's this: " I am more than dissatisfied with the political impasse in Greece in recent weeks. I'm also addressing the German opposition when I say this: You can't solve a debt crisis by constantly incurring new debts." And yet that is precisely what Bailout 2 is doing as we have patiently explained over and over [8].
Yet Guido said something else which may be of interest to everyone else in Europe: "I don't want a German Europe. Q. What do you want? A. A European Germany." Aaaand, enter lost in translation interpretations.
What, however, certainly can not be misinterpreted is the following: "There is a tendency toward re-nationalization throughout Europe, which I oppose. Germany occasionally shows a tendency to boast, which concerns me. I don't think it's smart for us to shift the differences among German parties to the French election campaign." Did Guido just slap down Angela Merkel for her decision to be Sarkozy's running mate in the French presidential elections in April? Because, as we asked before, what happens to Die Frau's credibility if the current polls leader - Hollande - who has promised to undo all European contracts and agreements, ends up winning?
Key selection from Spiegel interview [9](in English, so Google Translate can not be blamed for translation losses)
Westerwelle: You know, I wonder why my predecessor Joschka Fischer, who doesn't exactly have a small ego, agreed to that curtailment of his authority at the time. I'll ask him about it the next time I see him.
SPIEGEL: So what contribution can you still make in this crisis?
Westerwelle: Ideas on the establishment of a stability union came from the Foreign Ministry. We played a key role in developing the fiscal pact. But I think there's more at issue: We must now open a new chapter in the integration of Europe. I also want to contribute to improving the image of Europe in Germany and the image of Germany in Europe, because when someone says: "Europe speaks German ..."
SPIEGEL: ... as Volker Kauder, the parliamentary leader of the Christian Democratic Union did ...
Westerwelle: ... then it can be misunderstood. By the way, Volker Kauder meant something completely different. I don't want a German Europe.
SPIEGEL: What do you want?
Westerwelle: A European Germany. We should not believe that we will always be the strong man of Europe. Ten years ago, we were still seen as the sick man of Europe.
SPIEGEL: Is Germany becoming too dominant at the moment?
Westerwelle: There is a tendency toward re-nationalization throughout Europe, which I oppose. Germany occasionally shows a tendency to boast, which concerns me. I don't think it's smart for us to shift the differences among German parties to the French election campaign.
SPIEGEL: You're referring to the chancellor's campaign assistance for French President Nicolas Sarkozy.
Westerwelle: No, I advise all parties to treat every country in Europe with a measure of respectful restraint. We can say very serious things to our European partners, but we don't have to offend them. If we believe that it's necessary to swing the Teutonic club on a surge of great economic success, we will eventually discover that it isn't a club but a boomerang. Europe is not the answer to history. It is our community of fate for the future, politically, economically and culturally.
SPIEGEL: Should we allow the Greeks to decide what they want to do with the money from Germany?
Westerwelle: I am more than dissatisfied with the political impasse in Greece in recent weeks. I'm also addressing the German opposition when I say this: You can't solve a debt crisis by constantly incurring new debts. Growth doesn't come from debt but from competitiveness.
SPIEGEL: Greece is getting a new infusion of cash once again, and yet hardly anyone believes that the country can still be saved. Is it time for an orderly default?
Westerwelle: Greece's future is in the hands of the Greeks. They have to demonstrate that they are serious. It isn't enough to adopt reform programs. Instead, the reforms have to be implemented without delay -- not at some point in the future, but now.
SPIEGEL: The second aid package will presumably be more expensive than anticipated, partly because the Greeks haven't kept their promises. How much longer will the German public put up with this?
Westerwelle: It's undoubtedly a moment of truth for Greece. If a sustainable and correct course is set in Athens now, Greece can expect our support -- but only then. There will be no more advance payments. Only actions count now.
SPIEGEL: Does Greece have to stay in the euro in any case?
Westerwelle: That remains our clear goal.