Did Germany Commit Euicide?

gallows guillotine execution

Ireland and Greece are in dire straits right now in part because they joined the EU common currency, and lost monetary flexibility.

Both the UK and Iceland are today in better shape because, although they have huge debt burdens, kept their own central banks.

But what about the EU’s core? Surely they’re OK, right? Well, Germany may be in fine shape from a balance sheet perspective (relatively low debt, high imports), but it’s had a series of very weak bond actions, for which it blaims market uncertainty.

Now, part of the issue is that all bond markets are weak right now, with investors flocking towards riskier assets. But Germany has the same monetary flaw that Ireland and Greece has, and it’s a flaw that Japan and the US don’t share.

At some point, the question of whether Germany commited euicide — killing itself by joining a common currency — may come up.

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