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That's ridiculous. Germany could extract 4% in seigniorage out of Greece. If the German government is unable to fund that without raising taxes...

Not to speak of the fact that they probably think they cannot do it without raising taxes partly because they wrote into the ECB regulations that the German government cannot borrow from the ECB. But of course, if Greece could borrow from the ECB we wouldn't be having this conversation.

Ultimately, this is all the fault of the Bundesbank's ideologues.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 01:41:51 AM EST
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