If Europe continues its steady march to financial depression and collapse of the Euro, no politician will be more to blame than German Chancellor Angela Merkel. Last week, Merkel repeated the same pattern that has characterized her behavior since the sovereign debt crisis began — resisting sensible reforms until the costs of delay became overwhelming, and then reversing course 180 degrees only after the damage was far greater than necessary.

First, the back story: It is essential to recall that the European crisis has come in two entirely distinct phases. Europe was actually on the road to a slow recovery in 2009, until hedge funds began attacking Greek government bonds and Greece’s neighbors did nothing. This process followed the disclosure by the newly elected Greek socialist government in October 2009 that the Greek state deficit was actually at least three times what had been claimed by the predecessor rightwing government.

The disclosure invited accelerating speculation against Greek sovereign debt, raising Greece’s borrowing costs. As Greece fell deeper and deeper into economic collapse, Merkel vetoed any aid from the EU or the European Central Bank (ECB).

Only when Greece having to pay close to 20 percent interest to borrow money, its government was about to default, and the crisis was spreading to the rest of Europe did Merkel relent, in early May 2010. But her price was a stringent austerity program that drove Greece deeper into depression and invited further speculation against Greek government bonds.

Read more at the Huffington Post.