Quite rightly, "... Germany will have to buy their bonds regardless, in order to finance the purchasing of their over produced products..."
Saw one American blogger compare the Eurozone to a giant "vendor-financing scheme" for the surplus countries' products.
That's may be why the Bundesbank allowed German banks to become the most overleveraged of Europe.
If the central bank had been "more prudential" and if the excess leverage had been judged by the Karlsrhue court as "unconstitutional", we might never have gotten into this debt mess.
Sources: http://ftalphaville.ft.com/blog/2012/09/06/1149431/financial-markets-cheer-the-death-of-the-bundesbank/
Causes and consequences, which are less constitutional and more avoidable?
ResponderEliminarThe Constitutional Court should look more closely at the "constitutionality" of the causes of the debt crisis from the side of the creditors, such as the over-leveraging of banks to over-extend easy credit which was doubtful from day one, giving tax-sparing benefits for cross-border loans to State-owned companies, and shifting loan losses to multilateral official creditors.