Wolfgang Schäuble

The Carrot Without the Stick

Schauble mikes DPA
Wolfgang Schäuble, Germany's finance minister, is known for tough talk and a hard line against Greece. But some doubt he will push the country out of the euro currency.
  • Why it matters

    Why it matters

    As finance minister of Germany, the euro zone’s largest economy, Wolfgang Schäuble, has the power to decide on Greece’s position in the single currency area.

  • Facts


    • Mr. Schäuble, a member of Chancellor Angela Merkel’s ruling conservative party, has been finance minister since 2009.
    • In 2012, Mr. Schaüble had been planning for a potential Greek exit from the euro area, then-U.S. Treasury Secretary Timothy Geithner has written in his memoirs.
    • A European Union with a “strong center” has been Mr. Schäuble’s political goal for more than 20 years.
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In the summer of 2012 when global financial markets were betting that Greece would bring about the demise of the euro zone, then U.S. Treasury Secretary Timothy Geithner jetted to Germany to discuss the matter with his counterpart, Wolfgang Schäuble.

To the American’s shock, Mr. Schäuble told him many in the European Union were willing to kick Greece out of the currency union and Germany was making plans to safeguard the financial security of remaining euro members in the case of a Grexit.

Mr. Geithner concluded Germany was dead serious about the booting Greece from the single currency, he would write in his memoirs.

Two and a half years after this encounter, the question of whether Mr. Schäuble favors a Grexit is more crucial than ever.

The new leftist Greek government last month narrowly averted a bankruptcy with new reform promises and an extension of its loans.

But new debt repayment deadlines are approaching, and there is talk of Greece needing another credit extension by this summer.

The euro zone — and perhaps the single currency itself — is by no means out of the woods yet.

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