So I would conclude that Merkel's March 2011 comments were probably motivated by the financial sphere's negative reaction to the Deauville proposal, saying "don't be scared, me and Sarko only proposed this for after 2013".

March? Merkel's position since October has been no losses for private bondholders before 2013

Germany's Angela Merkel, by contrast, pushed ahead with her plan to set in concrete the principle that government bondholders should be prepared post-2013 to suffer losses if a government can't pay its bills. She got her way and EU governments this month backed the principle as part of a future financial-rescue regime. Do note, however, that even conservative Angela Merkel kicked the can down the road a couple of years like any run of the mill politician is likely to do.

Even so, Ms. Merkel's decision to be explicit about the possibility of future bondholder losses spooked the markets. There, a little more ambiguity might have been a good thing. Usually markets tend to like certainty but it is apparent that bondholders of sovereign debt dislike the certainty that in the future they will have to share in losses due to governments having a solvency problem and restructuring, really defaulting, on government bonds.

Of course, if you tell the markets you'll allow defaults after 2013, you won't be able to place any bonds in the open market with maturities after 2013...

Economics is politics by other means