Well this story brings wiki leaks and the Greek debt crisis together nicely. I think we all know everyone spies on each other. But the U.S. and UK got busted by Snowdon via wiki leaks. The fallout has been huge and it's claimed it has even cost lives. The below story is one intercept among many many thousands now leaked. It's interesting because it confirms Merkel was doubtful Greece could pay off the debts all the way back in 2011 but has still made them suffer for four years (is how many a Greek will see it). Not helpful. Good find though:
Greek crisis: NSA phone tap of Angela Merkel reveals she knew Greece's debt was unsustainable
Back in 2011, before the most recent reorganization of Greek debt, German Chancellor Angela Merkel told her personal assistant that Greece's debts would still be unsustainable under the terms of the new arrangement unless it received more generous assistance from Germany and other wealthier European countries.
That's according to this National Security Agency intercept of her communications, revealed to the world by Wikileaks:
This is one of these things that's going to be treated as a bombshell by some, and as "everyone already knew this" by others. Understanding why some will scream and others roll their eyes helps explain some important aspects of the situation.
Greece's debt isn't about money
Greece's debts really are unsustainable. This is just basically not a debatable point. The reason it's not genuinely shocking to hear that Merkel privately admitted this is that nobody really disputes it. Greece's creditors know that they aren't going to be paid back. But they want the debt to stay on the books anyway.
Why?
Well because as long as the debt is on the books, Greece needs to keep asking for permission to roll the debt over and failure to pay debts can be used as a political trigger for forcing Greece out of the Eurozone. The debt, in other words, isn't about money. It's about political control. If the debt is formally forgiven then not only do Greece's creditors need to write down some money, but they need to let Greece go on its merry way. If the debt is merely subjected to repeated rounds of extend and pretend then Greece's creditors get to keep making various demands about structural reform.
It's not, in other words, that Europe wants Greece to reform in order to get its money back. It's that Europe wants Greece to remain formally on the hook for its debts as a tool to get Greece to reform.
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