Germany, it seems, has neither the will to fix the euro nor the courage to pull the plug on it. Angela Merkel opposes the kind of real reform that might end the crisis for good, but when faced with a choice between the possible break-up of the eurozone and yet another bailout, she has (so far) proved willing to make concessions. The pattern looks set to be repeated with Spain over the weekend. Most economists agree that Germany has done well out of the euro, its strong economic performance over the last decade owing a lot to artificially low production costs at home and artificially high demand on the eurozone’s periphery. But in his new book, Germany Doesn’t Need the Euro, Thilo Sarrazin, a former member of the executive board of the Bundesbank, dismisses this argument out of hand, claiming instead that Germany has gained nothing from the euro because it hasn’t been growing any faster than northern European countries that stayed out of the single currency.
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