Germany's reticence to come to the rescue of the Greek government has been widely criticised across the euro zone.
While those in the euro where hoping for leadership, German Chancellor Angela Merkel's government appeared willing to allow the problem to fester in the hope that it would drive down the euro and help German exporters.
In Germany, the talk has been of kicking Greece and others out of the euro zone, but with Greek debt now rated as junk by S&P analysts are questioning if Merkel and her team have got things badly wrong.
"If the politicians in Berlin really think that they can engineer a Greek austerity package or even ejection from the euro zone via the route they have currently chosen, i.e.
self-righteous moralizing when the moment calls for action and not pontificating, then they are sorely mistaken," Marc Ostwald, a strategist at Monument Securities, said Wednesday.
Having failed to enforce the stability and growth pact after the launch of the euro, Germany is now paying the price, and Ostwald said the cost of this mistake is rising quickly.
"The situation is now out of control, and they are fiddling while Athens burns, with the threat of broad contagion looking ever more inevitable," he said.
As Merkel meets with the heads of the European Central Bank and International Monetary Fund in Berlin Wednesday, Otswald said he believes the German chancellor has to answer some tough questions.
"Does the German government really think that the consequences of their current actions will not be calamitous for the German banking sector?” he said.
“And if they really want to force austerity on the euro zone as a whole, then the nascent export-led recovery will founder on the rocks of their idealism, as the Euro zone goes into a protracted contraction.