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View Diary: Bank Run in Cyprus, Will it Spread to Southern Europe? (322 comments)

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  •  You are a little confused (4+ / 0-)

    Kavalor is trying to explain what is really true: the average German on the street has been played for a sucker.  Despite the high productivity, wages are a lot lower than in peer countries and the austerians have convinced ordinary people to accept this and also a high savings rate that got pumped into paper from the other EZ countries and, incidentally, shitty US mortgages.

    So, basically, Merkel (or the other parties to some extent, except maybe the Pirates) really can't come out and just announce this.  If she wants to win reelection against a weak opponent, either the paper will perform or she'll put a beatdown on the working class in the South, just to keep the base happy and in line.  (It is not that different than American pols and high house prices or wars.)

    This is, clearly, not a practical solution, but, honestly Germany's major parties are a little short on leadership of the type that will take Europe to the next step.  Merkel, in particular, is a kind of weak player who starts with big talk and then eventually gets backed down into the situation that was supposedly was "impossible".  Cyprus is, however, too weak to do much.  So here we go.

    The problem with a lot of the comments is that they are ignoring the path-dependent politics in the EZ.  Different governments, with different commitments, would probably do something different.  But they aren't.

    (A running joke is members of her party being forced to resign because of bogus PhD theses, after Merkel backs them and expresses confidence.  To me, this is basically a decent summary of her skills.)

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