A message to Germany


“What’s needed, clearly, is for Europe — and ultimately that probably means the ECB — to provide for Spain and Italy the kind of backstop countries with their own currencies can provide for themselves. Without that, the whole euro system is at risk of unraveling, not over the course of years, but over the course of a few weeks” (Krugman here)

And I wold like to add that Foreign Policy magazine holds that Germany should accept a principle of fiscal redistribution in a common currency area (here). Ok, they do so by suggesting that Germany should “buy” a few troubled countries in the EU, but it is still fiscal redistribution!

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