Merkel Tested as Escalating Greek Crisis Hurts Euro

http://www.nytimes.com/2010/04/29/world/europe/29germany.html

For months Mrs. Merkel played for time, talking tough on Greek debt and the need for Athens to institute strict austerity measures while hoping to stave off a bailout decision that many believe is inevitable until after voters in North Rhine-Westphalia go to the polls.

But some analysts say that the German people’s desire for stability, and particularly a stable currency, will ultimately outweigh their distaste at bailing out the Greeks.

Gerd Langguth, professor of political science at the University of Bonn, said the political fallout from joining in the rescue of Greece, including on the election in the state of North Rhine-Westphalia, would be less than many had predicted.

“The people in Germany know that if this operation doesn’t work, the whole euro would be damaged and this is damage for Germany,” he said.