Two things of significance emerge from the meetings in Washington. The first is that the the various countries of the euro zone have at last woken up to the fact that they are in dire trouble. The second is that somebody among them has done the maths and a partial 50% default by Greece is being planned at last.
Beyond that we are back again to ringing declarations in public and ringing hands in private. An increase to e2trillion for the euro bail out fund is called for but has to be voted through by many parliaments. This Greek orderly default has to be negotiated with all manner of interested parties and taxpayers have to come forward with cash to prop up insolvent banks. Had all this been put in train nine months ago when it was obvious to all but the blinkered that this was where the numbers led, the crisis might have ended there.
It was not, so the crisis grows. It is not now clear whether a 50% default will save Greece, or if its economy is too weak to cope even with that. It is not clear whether the multi-level negotiations will be timely, nor that Greece will be able to stay in the Euro for sure. Above all it is not clear whether the political balance in Germany will allow it to agree to any of these proposals. In the end Germany is the paymaster. Without its cash the Euro is doomed. With its cash Germany is King. Odd that, when you consider the history of Europe over the last hundred years.
Having woken up to the gravity of its financial crisis, the countries in the euro zone have another issue to tax their hesitant leaders. Either they set up a credible system of central management of their economic policy to back their currency, of which Germany is a constituent part, or Germany will do it for them and they will have to do as they are told. Because at the heart of this financial contagion and political paralysis is one central question, to which everything else is subsidiary. It is simple and stark. It is this.
Does Germany remain part of Europe or does Europe become part of Germany?
Either way, the Germans are relaxed. Not so most of the others.