My own view is... [that] the German deflation regime is - in the current circumstances - the greater threat to Greco-Latin societies, and to post-War comity in Europe. Sometimes you have to go through a cathartic trauma to break free.
But it is also true that Germany’s own democracy may turn fractious if policy strays too far from German needs and Grundgesetz. This is EMU’s curse. It destabilizes each nation state in turn, each in different ways - a “negative sum game”.
The worst of all worlds would be a nasty spat between Mr Hollande and Chancellor Angela Merkel that poisoned the atmosphere without bringing about any substantive change to Europe‘s “asphyxiation compact”.
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-- • Foreign Relations • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • France
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