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b_b  ·  3435 days ago  ·  link  ·    ·  parent  ·  post: Piketty: Germany has no standing to lecture other nations on debt.

    Now that Europe is trying oh-so-hard to counterbalance the USA, Germany is insisting that they can't waste money on those spendthrift Greeks because they know that if Greece goes to shit it will be American troops that will march on Athens.

In addition to the reasons you cite, I think Germany has an ulterior motive to wanting to keep Greece (and other weak Eurppean economies) in the Euro. Namely, Germany is the largest export economy in Europe, and if I'm not mistaken, the second largest in the world. Greece, Portugal, et al. keep the Euro artificially low, and the shittier they get, the weaker the Euro gets. At the time of writing this the Euro costs $1.11. Remember when the Euro cost $160? Not so good for BMW sales, is it? BMW, Audi and Mercedes are the leaders in the luxury market, and keeping their, Siemens', TyssenKrupp's, and the rest of their heavy industry's products 30% cheaper around the world sure isn't hurting the German economy.

Germany wants Greece to squirm. It was pointed out by the leader of the CEPR recently that the ECB made history last week when it became the first central bank ever to deliberately cause a financial collapse when they cut Greece off (for anyone not familiar, the whole point of a central bank is to facilitate finance). They will hem and haw, but they definitely will not kick Greece out of the Euro. What happens to Germany when they're trading in Deutsch Marks, or even a currency that only includes Benelux and France? That easy money they've had recently dries up. BWM may be cooler than a Cadillac or a Lexus, but it looks a lot cooler when they all cost $50k. Doesn't look so great when the Caddy comes in $25k under in the same segment.

No matter how much money the "bailouts" cost Germany in nominal terms, a strong Deutsch Mark will cost them a lot more. Of course they can't say that out loud, so they keep toeing the line about "moral responsibility". The easiest way to tell if a leader is lying is to examine their remarks for appeals to morality.