ZURICH, Switzerland, Feb. 6 (UPI) -- The mouse has roared. The third and smallest member of the Greek government coalition has rejected the latest terms for a $180 billion European bailout of its crumbling economy and its leader has been handing out drachmas, the coins of the old national currency before the euro.
The latest negotiations between the European Union, the Greeks, the International Monetary Fund and the Institute of International Finance (representing private creditors) have gone beyond brinkmanship.
Deadlines are set and the Greeks say "Tomorrow." Conditions are laid down and the Greek government says it must consult the labor unions or labor court judges or the trade associations. And in all cases it must bring on board all the members of the government of national unity, which seems united only in its determination to negotiate, stall and maneuver its way out of the conditions.
And who can blame them? Greece's gross domestic product contracted 6 percent last year, after falling 4.5 percent in 2020. Unemployment is almost 20 percent and this year's budget deficit is more than 9 percent. This is more than austerity; it is economic repression. That is the Greek view.
But then there is the German view. Every single commitment the Greeks have made has been broken, the Germans retort. Promises of raising $65 billion in privatization of state assets have gone nowhere. Promises of cutting the swollen public workforce have not been met. Promises to balance the budget have failed. Promises to reform the labor market have not gone beyond cosmetics.
"We can't pay into a bottomless pit," said German Finance Minister Wolfgang Schaeuble. "Greece needs a new program, there's no question about that, but Greece must create the conditions for it."
So the Germans, backed by the EU Commission, the European Central Bank and the IMF, are making their demands explicit. They want an immediate 25 percent cut in the $986 minimum monthly wage, an end to the traditional holiday bonuses (often a month of extra pay) and to supplementary pensions.
This represents the German compromise. Last week, they were suggesting installing a European overlord in Athens to ensure that the government's budgets and spending and taxes were agreeable to the European paymasters. They also wanted the first charge on all tax revenues to be repayment of debt.
Quite simply, the Europeans, backed by Germany, have run out of patience. Veteran European statesman Jean-Claude Juncker, Luxembourg prime minister and the head of the eurozone group, warned Greece in a media interview that it must either meet its creditors' requirements or default. It shouldn't expect any further support from its eurozone partners.
The Greek view is that they have suffered enough and heard more than enough demands and ultimatums.
"We need to examine whether the creditors' demands are in favor of growth for the sake of the Greek people, otherwise we will not get the support package. I am not going to sign up to that," said Giorgos Karatzaferis, the head of the ruling coalition's third partner, the Popular Orthodox Rally.
The outcome can be predicted. The Greeks will cave and accept the terms but then drag their feet over implementing them. The deadline is March 20, when Greece must meet a $19 billion bond payment but for technical reasons an agreement has to be sealed by Feb. 13.
Behind this drama over the Greek deadline a further drama was unfolding over the weekend at the Munich security conference, where U.S. Secretary of State Hillary Clinton gave the Europeans her full moral support.
"I have heard all the talk about where Europe fits into America's global outlook. But the reality couldn't be clearer: Europe is, and remains, America's partner of first resort," she told the Munich Security Conference. "We remain confident that Europe has the will and the means not only to cut your debt and build the necessary firewalls but also to create growth, and to restore liquidity and market confidence."
What Clinton was really saying was that the U.S. economy was starting to recover and unemployment was going down sufficiently to give President Barack Obama a strong chance of re-election in November. The biggest single threat to this wasn't the Republican hopeful Mitt Romney but the prospect of a meltdown in the eurozone.
Clinton was word-perfect on the latest gloomy IMF forecast, which sees the European economy shrinking 0.5 percent this year but by a massive 4.5 percent, worse than the region's 4.1 percent drop in 2009, if the eurozone starts to unravel.
No German official will say it publicly but in private they mutter that the IMF under former French Finance Minister Christine Lagarde is looking more and more like a tool of French national policy, just as it did under her predecessor Dominique Straus-Kahn, who began the IMF policy of bailing out the wealthy eurozone.
Beset by the Americans, the French, the IMF and the Greeks, the Germans are feeling encircled again, a mood which seldom brings out their best.