Gonzalo Lira has an excellent piece up explaning why Germany is screwed when it comes to the choice of leaving or staying in the Euro.

The following snippet is a good demonstration of why I like reading his articles :

Nobody likes getting screwed unless its by a supermodel in a grungy club bathroom. Thus Germany has every incentive in the world to not only refuse to renegotiate sovereign debts, but also do everything in its power to keep these debtor nations in the eurozone.

The issue at this point in time is, Will the Germans allow a little debt relief in order to keep the weaker nations inside the eurozone? Or will they rape them so badly via austerity measures and intransigence, that they essentially force the weaker economies—Greece, Portugal, Ireland, Spain, Italy—into exiting the European Monetary Union, going to local currencies, and then devaluing?

That’s the summary – go and read the full post.

1 Comment

  1. Celestine

    Germany has every incentive in the world to not only refuse to renegotiate sovereign debts..but also do everything in its power to keep these debtor nations in the eurozone.