Oliver Q
0
All posts from Oliver Q
Oliver Q in European Markets,

Greece vs. Germany: It's getting really ugly

Did the Greek finance minister really show Germany the finger?The Germans think so, and they are fuming.

Germany's best selling newspaper Bild published a picture of Yanis Varoufakis' raised middle finger, taken from a YouTube video, on its front page Tuesday.


Varoufakisis seen making the offensive gesture during a speech in 2013, before he was finance minister. He was arguing that Greece should have defaulted in 2010 rather than accept a massive rescue from its eurozone partners.

"My proposal was that Greece should simply announce that it is defaulting ... in January 2010 and stick the finger to Germany and say, well, you can now solve this problem by yourself," he said on the video.

Varoufakis has denied raising his finger, and was quoted by German media as describing a clip shown on German TV as a fake. But the broadcaster said it saw no sign of tampering. And Varoufakis tweeted a link Monday to what he called the "undoctored" video, where the gesture is plain to see.

Whatever the exact circumstances, the row couldn't have come at a worst time.

Germans are fast running out of patience with Greece, just as Greece fast runs out of money. It needs Berlin's support if it is to remain in the euro.

A recent opinion poll by German television showed 52% of Germans would like to see Greece out of the euro, up from just 41% last month.

The relationship between Athens and Berlin has been deteriorating rapidly since the new Greek government started accusing Germany and its other creditors of bullying over its 240 billion euros bailout, and demanding a renegotiation of terms or even another debt haircut.

But Germany, and in particular finance minister Wolfgang Schaeuble, is having none of that, insisting Greece must stick to the deal it signed.

The war of words has intensified in recent days. The Greek government launched a formal complaint last week, after Schaeuble was reported to have called Varoufakis "foolishly naive." Berlin suggested the remark was mistranslated in the Greek media.

Meanwhile, Greece added to the strain by asking Germany to pay wartime reparations for the Nazi occupation during World War II -- a demand called "bizarre and impertinent" by German media.

Prime Minister Alexis Tspiras went as far as suggesting Greece could start confiscating German assets if Berlin refuses to pay.

He will face Chancellor Angela Merkel and other European leaders at a summit in Brussels Thursday, where Greece's finances will no doubt be a talking point.

Who wouldn't want to be a fly on the wall in that room!

CNNMoney (London)