But Mrs. Merkel called the bankers’ bluff, said officials present at the discussions. Accept the 50 percent write-down, she told the bankers, or bear the consequences of default. In effect, she was willing to risk a credit event, and to place the blame for any fallout on them.The key words here are no, risk, and blame. Conspicuously absent from Obama's negotiating vocabulary and repertoire.
Yes, the European debt deal is inadequate and leaves core questions unresolved -- how the banks will recapitalize, how the bailout fund will be funded, how countries crippled by imposed austerity can grow and thus repay their debt. But given the imperative to get this minimum threshold demand across, Merkel didn't blink.