Germany Less Worried About Greek Default

Germany’s finance minister, Wolfgang Schaeuble, ratcheted up the pressure on Greece to agree to stricter austerity measures in return for a $172 billion bailout package. Schaeuble said:

What we’re experiencing at the moment is much less bad than what may happen to Greece if the attempts to keep Greece in the euro zone failed.

If the Eurozone is less concerned about the effects on its economic growth that would follow from a Greek default, then the implied threat here is that Greece had better toe the line or it will be cut loose to fend for itself.

Greece has not yet responded to Schaeuble’s statement, but the reaction is not likely to be what Germany expects to hear.