@chris McCarthy wrote:
But it seems the conclusion is… it is all down to Germany now.
Here is another viewpoint, the Germanys see the cost of money print as too high.
While the eurozone endgame is impossible to know, I still think the most likely outcome is that several of the peripheral nations will leave, re-denominating their debts in pre-euro currencies, so allowing the core countries to stabilise. This, I believe, is what Germany really wants.
Scaling-back monetary union would take us to a better place, with the big eurozone economies no longer seemingly on the hook for everyone else’s debts.
A downsizing would also be far more implementable, logistically and from a banking point of view, than dismantling the entire edifice. Attempting to do that, I fear, would end in financial chaos. It would also sow the seeds of recrimination and potential conflict across Europe for decades to come.
Its an argument that has a precedent, Germany kicking the UK out of the ERM (the author claims Germany stood idly by when, actually, they orchestrated it). The euro still makes sense to some countries, kick out the weak and the euro rise will reduce the cores debts. The peripheral will have debts in the new currency will follow the rise/fall. German will only have to support its own banks.
Its going to be a blood bath.