Chancellor Merkel is not ruling out forgiving some of Greece’s debt in 2014.
Until she is reelected, there is always the chance that voters will disapprove of all the money that Germany is handing out around Europe. After election to what will probably be her final term, voter outrage no longer matters to her.
Of course, she qualifies the offer making it contingent upon the Greek budget situation improving. Merkel, if the Greeks can get their fiscal house in order without debt write-downs, then they do not need your help.
If Greece improves dramatically by 2014, Germany will refuse the debt write-down because it is no longer needed. On the other hand, if there is no improvement, it can be refused because the Greeks are not behaving themselves.
Yet, she leaves the door open to more aid, because everyone knows that there will be a fourth bailout and a fifth, sixth and seventh. There will be as many bailouts as necessary to prevent Greece from defaulting.
While this helps the Germans by maintaining the eurozone, it certainly does not in any way improve the lot of the Greeks. They are doomed to economic depression until they just default and get it over with.