Ex US Treasury Geithner: German FinMin Schaeuble had a “Grexit” plan in July 2012

The US Empire strikes back! After the Financial Times revelations that EU President Barroso picked up Lucas Papademos as Greek Prime Minister in 2011, former US Treasury chief Timothy F. Geithner reveals that German Finance Minister Wolfgang Schaeuble wanted Greece out from the euro area also in Junly 2012. That is right after the two parliamentary elections in May and June 2012, that blessed the Greeks with the pro-loan agreement of Samaras and Venizelos.

In his book, “Stress Test: Reflections on Financial Crises,” published on Monday, former US Treasury chief Timothy Geithner recalls a meeting with German Finance Minister Wolfgang Schaeuble. The meeting took place on the German island of Sylt in July 2012 and Schaeuble presented Geithner a “Grexit” plan.

“According to the book, Schaueble argued that several eurozone countries were in favor of Greece leaving the single currency and that this would allow Germany and others to create a firewall around the remaining members.

“I found his strategy frightening,” writes Geithner, adding that he subsequently informed US President Barack Obama upon his return to Washington, who in turn was “also deeply worried.”

According to Geithner, Schaueble’s plan was based on the assumption that with Greece out of the picture, Germany would be in a position to provide financial assistance to the rest of the eurozone as the German people would be less reticent about this than they were about bailing out the Greeks.

Following the meeting, Geithner made a stopover in Frankfurt to meet with European Central Bank president Mario Draghi, who assured him that a Greek eurozone exit was not being planned. (via here and here)

I can’t help but wonder why  these revelations are taking place now and thus short before the EU elections. A US strike against the EU and Germany that strictly oppose a further Greek debt relief?

But in Greece there is a saying: When buffaloes fight against each other, it’s the frogs that pay the price…