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Merkel's conservative allies are on board.

German conservatives' eurobond awakening

So why did Germany's conservative bloc go from being the scourge of southern Europe to its enthusiastic savior? In a word, business.

Unlike the euro crisis, which triggered dramatic turbulence in financial markets but left German industry unscathed, the corona pandemic threatens Germany's own economic stability. The nations in the eye of the euro crisis storm, such as Portugal and Greece, were not key German trading partners. The countries in focus now -- especially Italy -- are a different story.

Italy is Germany's fifth-largest trading partner with a total trade volume of more than €125 billion last year. Major German car companies and machinery makers rely heavily on suppliers in Italy's northern industrial corridor. Permanent damage to those supply chains could also do irreparable harm to German industry.

That's why German industry, traditionally close to the CDU, has been one of the loudest voices urging Berlin to push ahead with the recovery fund.

by Bernard (bernard) on Thu May 21st, 2020 at 12:56:14 PM EST

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