Germany will break the Eurozone
Reporting from Greece, Joe Weisenthal says that Greeks are more apt to blame themselves for the ongoing crisis:
Whereas the international finance/chattering community talks a lot about the Germans and the flawed Eurozone structure (the inability of the Greeks to print their own money, and so forth), the Greeks seem furious with their own leaders, and think the debt is just a byproduct of a corrupt social system. It's for this reason that there's skepticism that leaving the Eurozone and letting the country print its own money would solve anything. If you think corruption is the big issue, changing currencies does nothing.As a corollary to this, outside of Greek radicals (like the Golden Dawn supporter I talked to yesterday) there isn't much Merkel hate I've encountered. People seem to think she's doing her job and what's best for the Germans.
Meanwhile, Gideon Rachman reads Merkel's mood in Germany:
My guess is that the Chancellor and her advisers have taken a look at the legal and political situation in Germany and, as the Americans like to say, â??done the mathâ? on the potential liabilities Germany is being asked to take on â?? and have concluded that there are some steps they cannot take.The Germans know â?? for example â?? that there are over â?¬2 trillion worth of bank deposits in Italy, Spain and Greece. Do they really want to stand behind all of that? Some will tell them that that is the only way to stop a catastrophic bank-run. But what if banks start to collapse anyway, and German guarantees start to be called in.
They could print money. Not an ideal solution, of course, and certainly a bitter pill to swallow given that German taxpayers didn't precipitate this crisis. But would it be worse than having the Eurozone (and possibly the world) fall into a depression that's potentially deeper and more painful than the one the U.S. just emerged from? I have no idea, but if the Germans have indeed 'done the math' and don't like what they see, then it seems that a partial breakup of the Eurozone is now inevitable.
