Merkel continues to put up impressive resistance to the attempts of Sarkozy and the international banks to put the printing press into overtime.
Question is, what will things look like when they come to a head?
A recovery in Spain, Italy and Greece looks as far away as it did in 2008 and the people in these countries are suffering.
Wages are dropping, business is dropping and savings are rapidly disappearing.
Something has to give at some point.
Either Italy, Spain and Greece will default or Merkel will approve the devaluation of the Euro, the question is who will blink first, Sarkozy or Merkel?
Deep down Merkel must know that there is no way to bail out the banks unless there is hyperinflation.
Deep down the banks know that for Merkel to approve hyperinflation things have got to get politically very bad for Germany.
How much money can the banks suck out of the Greek and Spanish economies? Will it come to the point where people do not have enough money to buy food?
Will pictures broadcast throughout the world of Greeks and Spanish starving force Merkel to open up the flood gates for money printing?
Will Merkel call time on the bail outs before things get this far?
Merkel must know that the more bailouts that Germany approves the weaker her position is becoming.
The longer the Greek government is kept on life support the more exposed she is becoming. Surely it would be better for Merkel to just say no?
The tough conditions being asked by Germany of the Greek government, could they be designed to force the Greek government to say enough, we don’t want the money!
Perhaps Merkel is surprised things have gone this far.
It seems it was only a few weeks ago the next tranche of Greek government bail out cash was in doubt and now, only a week into January, the next tranche is in the news.
I can see this being a constant issue for the forseeable future, Greece’s next bailout tranche being in doubt.