The former US Secretary of the Treasury Timothy Geithner recently authored a book entitled “Stress Test: Reflection on Finances Crises”, where he outlines the German plans for a Greek exit from the Eurozone in July 2012. In his book, Mr. Geithner claims that when he met German Finance Minister Wolfgang Schäuble in Sylt, in the North Sea, he was told that many were in favor of expelling Greece from the Eurozone.

The German Minister claimed that with Greece gone, Germany would be able to provide the necessary financial support for the Eurozone, because the German people would not perceive it as a handout to Greece. At the same time, the shock of a Greek exit would convince the rest of Europe of increasing protection.

The author claims that he found the proposition to be terrifying and revealed that the negative predisposition towards Greece existed as far back as 2010, when a G7 meeting was held in Iqaluit, in Canada. Mr. Geithner argues that there were calls for austerity and “Old Testament justice” as well as calls to deter the moral hazard that would be triggered from supporting Greece.

Elsewhere in his book the author points out the problems in the Greek rescue package, which was initially to be limited to 25 billion euros and harsh measures. Geithner estimates that the 110 billion euros that was eventually agreed upon between the EU and IMF was “subverted by the huge cuts and Old Testament rhetoric”.

Based on published data, between January 2010 and June 2012, Timothy Geithner had 168 meetings and telephone discussion with Eurozone officials and 114 with the IMF.

Relevant to the book is Evangelos Venizelos’ recent interview where he discussed his meeting with Wolfgang Schäuble at the Monopol Hotel in Wroclaw, Poland on the 15th of September 2011. According to Mr. Venizelos, the German Finance Minister proposed the conversion of the Greek program to an exit plan from the Euro. Mr. Schäuble was accompanied by Jörg Asmussen, who told Mr. Venizelos that they a plan ready for a “smooth exit” where each Greek citizen could withdraw 50-100 euros a week from ATMs.