For euro zone, the heat is on

By Noah Barkin – The euro zone crisis seemed to vanish from the headlines for a brief moment as 2011 ticked over into 2012, but it is about to return with a vengeance.

After years of frustration with the French president‘s shoot-from-the-hip style, government officials in Berlin say they are now worried about the end of “Merkozy,” the most important relationship in Europe, in the middle of the crisis.

“In the current market environment there is no room for using a Keynesian-type expansionary fiscal policy to boost demand in countries with low growth – the markets will simply not accept such a strategy,” Deutsche Bank said in a confidential note on the crisis prepared for the German government late last year. more>

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