German government denounces Greek proposal as "Trojan Horse"

Rather than publicly explain their reasons for rejecting the latest proposal from the Greek government to keep their country solvent, the German finance ministry leaked a memo explaining their reasons. There are some reasonable arguments in here, but I do think a tell is that they describe the Greek ideas as a "Trojan Horse"

This gets at the fact that the Germans simply don't trust the Syriza government that is running Greece. It also gets at the fact that one of the reasons they don't trust them is simply that they are Greek. The Greeks are viewed as an unreliable country that is in need of discipline and reform, and Syriza is seen as a political project that is fundamentally about resisting reform. The Greek proposal read at a high level as Greece basically giving in to what Germany wanted, but the Germans don't want to sign anything that has any wiggle room because they don't trust the Greeks.

Efforts to assess the situation purely through the lens of macroeconomic models necessarily end up leaving this human and political element out. But it's a huge driver of the process.

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