Greek trump card fails as stronger Europe shrugs off break-up threat – Telegraph

February 8, 2012 § Leave a comment

mawillits

The European Central Bank’s flood of cheap credit for three years has removed the immediate threat of a banking crisis and proved a powerful tonic for confidence, transforming the character of the crisis.

Bond yields have plummeted in both Italy and Spain since November, largely decoupling from the ups and down of daily events in Athens. The effect has been to nullify Greece’s trump card: the implicit threat to bring down the whole edifice if treated too harshly.

“It’s not the end of the world if someone leaves the eurozone,” said Nellie Kroes, the European Commission vice-president, uttering in public a view already prevalent in Berlin and other northern capitals as Greek rescue costs rise by a further €15bn to €145bn.

“It’s always said, if you let one nation go, or ask one to leave, the entire structure will collapse. But that is just not true,” she told De Volksrant.

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