Angela Merkel is desperate to save the Euro!
Greece is one problem, but Portugal and especially Spain are much bigger problems. The spreads on Iberian debt relative to German bunds are at or approaching post-EMU highs.
Beyond crushing fiscal austerity at a time of puny global economic growth, what’s really needed is a recognition that either the so-called peripheral states or Germany itself must exit the euro.
Chancellor Merkel at last appears to understand what’s at stake, but she’s not yet willing to accept that Euroland must become smaller and allow devaluation by the most troubled, soon-to-be non-Euroland countries.
The alternative is large scale default, followed by the collapse of the European banking system.
Gorilla says: “What spreads even faster than swine flu? The contagion of German complacency!”
