The problem Merkel faces is that she knows what needs to be done to stabilise the situation. She does just doesn't have a clue how to get re-elected after she does it. So she probably won't do it.
The core problem with the eurozone is that it's "stability" is based on Germany's strength. If Germany is not prepared to stand behind it, then it's toast. But if Merkel does let Germany stand behind it (assuming she can get it past her own courts) then German taxpayers are going to be bailing out spend-crazy Mediterranean states for years to come, and in very large sums indeed.
So, Merkel will be a politician that will have to tell her tax-payers, and more relevantly her electorate, that there's no money in their banks, and that services have to be cut and taxes heavily increased, in order to give the money to countries that can't run their own affairs. And that is going to be an awfully popular thing to do before going into an election. It's the equivalent of blowing her own political brains out. Sheer suicide.
Will German tax-payers put up with footing the bill for this bailout? In my opinion, no, they won't. And because of that, the euro in it's current form is doomed, and that is going to create all sorts of mayhem for countries and economies all over the world if we aren't very lucky indeed.
I hope to hell the eurozone can't find a way out of this, but I can't see how it is likely, given not just the financial situation, but both the economic and political ones as well.
If anyone wants me, I'll be in the bunker, restocking the shelves with tinned food and water.
The core problem with the eurozone is that it's "stability" is based on Germany's strength. If Germany is not prepared to stand behind it, then it's toast. But if Merkel does let Germany stand behind it (assuming she can get it past her own courts) then German taxpayers are going to be bailing out spend-crazy Mediterranean states for years to come, and in very large sums indeed.
So, Merkel will be a politician that will have to tell her tax-payers, and more relevantly her electorate, that there's no money in their banks, and that services have to be cut and taxes heavily increased, in order to give the money to countries that can't run their own affairs. And that is going to be an awfully popular thing to do before going into an election. It's the equivalent of blowing her own political brains out. Sheer suicide.
Will German tax-payers put up with footing the bill for this bailout? In my opinion, no, they won't. And because of that, the euro in it's current form is doomed, and that is going to create all sorts of mayhem for countries and economies all over the world if we aren't very lucky indeed.
I hope to hell the eurozone can't find a way out of this, but I can't see how it is likely, given not just the financial situation, but both the economic and political ones as well.
If anyone wants me, I'll be in the bunker, restocking the shelves with tinned food and water.