Merkel says Greek maturities and interest rates up for debate but no haircuts

Comments from Merkel on German TV Sunday:

• We can talk about changing maturities of debt and lowering interest after first successful review of the bailout to be negotiated
• Can't have a classic haircut in currency union but this is possible outside currency union
• Schaeuble's proposal for a temporary Greek exit was on the table but we chose another option
• Only options is to work with Greece or there will be a chaotic situation

About the only thing Greece can afford is a perpetual zero-interest loan but it sounds like Merkel wants them to suffer every step of the way.

Merkel is making a long-term mistake for Germany. They were seen as disciplined but fair but that's increasingly changing to brutal and inflexible.