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Germany financed cohesion funds for decades. So Germany has a limited willingness to pay. Do you really expect a country to risk going broke for the European project assuming unlimited liability?
by oliver on Sun Nov 27th, 2011 at 11:09:54 AM EST
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I guarantee you that Germany will go broke if it breaks the euro.

This isn't a zero sum game. The reason Germany financed cohesion funds was so it would have markets to sell its goods to. Positive sum game: everyone wins.

by Colman (colman at eurotrib.com) on Sun Nov 27th, 2011 at 11:13:43 AM EST
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But if you break a positive sum game you get a negative sum outcome.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Nov 27th, 2011 at 11:38:17 AM EST
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I prefer to say 'But And if you break a positive sum game you get a negative sum outcome.' which is the reason for a reasonable government to help solve this problem. In the way Merkel has ruled the only beneficiaries are in the financial sector, and the most sufferance is born by people who had no hands in creating the problem.

res humą m'és alič
by Antoni Jaume on Sun Nov 27th, 2011 at 12:58:13 PM EST
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Merkel was certainly not the origin of the neo-liberal infestation of the EU and the European banks, but she does go along with much of the worst of the doctrine. This is probably because she sees them as constituents and thinks she is helping them. I do give her credit for pushing for writedowns, at least in some fashion.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Nov 27th, 2011 at 02:04:37 PM EST
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Welcome to ET, Oliver.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Nov 27th, 2011 at 11:47:09 AM EST
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Germany financed cohesion funds for decades.

That's not a bug, that's a feature. Germany has a higher per capita GDP than the recipients of those funds.

So Germany has a limited willingness to pay.

As the country with the largest internal current accounts surplus, Germany is the country that has to defend the currency union. If Germany does not want to defend the currency union, then Germany does not want a currency union. If Germany does not like being the country that has to pay to defend the currency union, Germany is free to end its mercantilist attack on its trading partners and allow German wages to rise to the level where the German foreign accounts balance.

Do you really expect a country to risk going broke for the European project assuming unlimited liability?

As the country with the largest internal current accounts surplus in the Eurozone, Germany cannot go broke from any conceivable solution to the Eurocrisis. So that question is totally irrelevant.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Nov 27th, 2011 at 12:08:12 PM EST
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