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Eduardo Porter on the choices facing Germany in 2012-2013
06/26/2012
As European leaders jointly push Germany to accept deposit insurance for European banks, European banking regulation, and eurobonds, Porter looks at the choices facing Germany. Eichengren of UC Berkeley says Ms. Merkel may be trying to extract as many quid pro quos as possible as she continues to oppose all moves to aid financially troubled eurozone countries. In the end says Porter it is in Germany's interest to relent, as the costs have been overstated, Germany will not forfeit aid money, and Germany is the main beneficiary of the declining competitiveness of its neighbors. A return to the deutsche mark now would present deeper problems for Germany as its exports would decline.
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