Will Greece run out of German sympathy?

As Greece heads for another election, there’s increasing speculation that the anti-bailout parties will do even better next time. Talking to people in Brussels, there’s an expectation that if this does happen German patience could snap and they might start pushing for Greece’s ejection from the euro. The argument goes that Merkel, who faces her own elections next year, can’t afford to let the Greeks change the terms of their bailout deal.

There is, though, one particular reason to be sceptical about whether Berlin would ever actually put Athens in a position where it would have to leave the euro. If Greece did go back to the drachma, the markets would ramp up the pressure on the other vulnerable Eurozone countries — particuarly, Spain and Portugal. Probably, the only way that this could be eased would be by the issuing of collecitve Euro-bonds, which is precisely what Merkel has been trying to avoid having to do throughout this crisis.