Critics say Germany is falling between two stools. It has backed EMU rescues on a sufficient scale to endanger its own credit-worthiness, without committing the nuclear firepower needed to restore confidence and eliminate default risk in Spain and Italy. It would be hard to devise a more destructive policy.

There is no change in sight yet. Chancellor Angela Merkel repeated on Thursday that Germany would not accept joint EU debt issuance or a bond-buying blitz by the ECB. "If politicians think the ECB can solve the euro's problems, they're trying to convince themselves of something that won't happen," she said.

Yet she offered no other way out of the logjam, and each day Germany is sinking a little deeper into the morass.

Read it all.

Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • Euro • European Central Bank • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • * International News & Commentary • Asia • China • Europe • --European Sovereign Debt Crisis of 2010 • Germany

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