Another interesting article from Dr Alf, courtesy of Joschka Fischer and Project Syndicate.

The assumption here and indeed everywhere else is that Mrs Merkel has to “come out of her comfort zone”, give the Greeks what they want and then all will be well.

This is nonsense. The Greeks will run out of money by July, unless their debts are rescheduled or written off; but based on years of deals reneged on and their past behavior, Greece is a recalcitrant debtor, unable and unwilling to pay its way and “negotiating” with them is effectively pointless because whatever is agreed with them will be repudiated later.

The Greeks are masters of bad faith when it comes to agreements, so from the point of view of credit risk and inability to pay a sensible person would have nothing to do with them.

Their Finance Minister interviewed on Channel 4 and answered not a single question.

In my view, Mrs Merkel and the EU should throw this country out of the EU and out of the Euro and sequester all Greek banks,shipping and major infrastructure and hold these assets in perpetuity until money plus interest is repaid.

Taking tough action now will give the remaining PIIG countries, particularly Spain, cause for pause where negotiating with Greece will embolden them.