When it becomes serious, you have to lie.— Jean-Claude Juncker
This is the first iron law of the eurocrisis, succinctly stated by Prime Minister Juncker of Luxembourg.
Politicians remain in power by maintaining the status quo. If the status quo is in danger of collapsing, then they must develop and implement a plan to repair it.
For example, think of what the allies did during WWII in order to deal with German, Italian and Japanese aggression. The allies developed a plan, garnered political support from all stakeholders and requested and received sacrifices from their citizens to implement it. Then, they kicked ass— problem solved!
If matters are beyond fixing, then politicians will lie in order to maintain a delusion of the status quo for as long as possible because when the delusion dies so do their political careers.
Now think of the Saddam Hussein and his government during the Iraqi War in 2003. The situation for the old regime was dire as the American-led coalition quickly subdued the entire country and surrounded Baghdad. Meanwhile, infamous cabinet minister “Baghdad Bob” kept saying that the invasion had failed and the Americans were retreating while artillery rained down on the city and fighter planes flew with impunity over his press conference.
The delusion died when the Americans entered the city to token resistance, and the government collapsed and went into hiding.
Watch for an analogous situation in Europe when the lies stop working and the delusion is lifted.