A hullabaloo has flared up in Germany over squashing democratic discussion on whether or not taxpayers should endlessly pay to keep Greece in the Eurozone and protect bondholders—namely the ECB and national central banks—from having to recognize reality on the worm-eaten Greek debt in their basements. The tools: political pressure, fake moral outrage, and ridicule. And not just in Germany. NPR announced on Sunday that only some “hardliners” in Germany were standing in the way of the world being saved by the ECB and German taxpayers.

The pressure comes from all sides: Chancellor Angela Merkel should forcibly shut up these unruly, inconvenient, sound-bite-hungry “hardliners” that make so much sense to the people who’ll have to pay for it all. Prime target: Alexander Dobrindt, General Secretary of the CSU, Bavaria’s sister party to Merkel’s CDU. His exasperation with successive Greek governments, their lies and broken promises, their extortion efforts and demands for ever more money has bled through. So he told the tabloid Bild that he sees “Greece out of the Eurozone by 2013.” After which it would get a Marshall Plan, he said. And rumors that the ECB would soon buy potentially unlimited amounts of sovereign bonds incited him to call its President Mario Draghi “the counterfeiter of Europe.”

He “is playing with fire in the European house,” warned Andrea Nahles, General Secretary of the opposition SPD. This must be forbidden; Merkel’s reminders to tone down the rhetoric and wait for the big Troika report simply weren’t enough, she warned. Thus has begun the process of strangling democratic discussion on an expensive and risky engagement for taxpayers.

The gagging attempts came even from the ranks of Dobrindt’s own coalition. “Europe is too valuable to endanger it with populist yapping,” said Justice Minister Sabine Leutheusser-Schnarrenberger; she demanded that his boss Minister-President of Bavaria Horst Seehofer gag him personally. Dobrindt was ridiculed as “Stammtisch clown.” CSU colleague Max Straubinger called it “provincial griping.” He was worried that Greece, with a devalued drachma, could no longer afford to buy imports—thus German exports—and that other dominos would fall.

Exports, Germany’s sacred cow, are already being slaughtered, and the country is awash in layoff talk. Friday, it seeped out that Opel, GM’s bleeding subsidiary, had a “secret strategy” of cutting 30% of its workforce—which the company hastily denied. Earlier last week it emerged that Siemens, Germany’s third largest employer, was planning to cut jobs to counteract orders that had collapsed by 43% in the first three quarters! Retailers like Karstadt announced layoffs. Steel conglomerate ThyssenKrupp is cutting hours.

The Ifo Business Climate index, after having dropped sharply in July, skidded further in August as the economy “continues to falter.” All-important export expectations slipped into the red zone for the first time in nearly three years. And retail expectations were down for the sixth month in a row—exacerbating a debacle in the making.

Industrialists are worried that a Greek exit, or its delay, could drag down other countries, and thus demolish German exports—a political nightmare for Merkel. Hence the need to hide behind something big and impenetrable, namely the Troika report, that could protect her both ways.

So she issued a dictum not to invoke Greece’s exit until after the report has come out. Much depends on it. Merkel and her ilk cite it as basis for their future decision on Greece, and they’re all going to hide behind it, regardless of how they will ultimately decide. It will be an effective cover even if an extension of two years and many more billions are approved—highly unpopular in Germany where 72% of the people were against such measures. But it wouldn’t matter; from Merkel on down, they’d all take cover behind the Troika report which would ostensibly tie their hands with incontrovertible “facts,” and it would catch all the blame.

Troika inspectors will return to Greece in September to sort through its economic mess and quibble with officials for much of the month. The report will likely be delayed until October, and a decision on Greece, especially if negative, may well drag into November—past the US elections, just as President Obama was rumored to have requested. Cobbling the report together is “a fairly extensive and complicated process,” said Merkel’s spokesperson Steffen Seibert; and there would be no “prescribed deadline.” Which confirms what has been her strategy all along. Read….  Letting Greece Twist In The Wind.

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