Doubts Over Merkel’s Euro Path Grow at Home

SPIEGEL ONLINE – Influential German economist Hans-Werner Sinn has always been something of a fly in the soup of Chancellor Angela Merkel‘s efforts to save the European common currency. As the head of the Munich-based Ifo Institute, Sinn has tirelessly warned that, with euro-zone central banks owing the Bundesbank upwards of €500 billion ($627 billion), Germany is in a precarious situation. “We are trapped,” Sinn has been fond of pointing out.

In particular, Sinn and his allies are concerned about the trend toward the creation of a European banking union and allowing the euro bailout fund, the European Stability Mechanism (ESM), to provide direct aid to struggling European banks instead of channeling that money through governments and attaching strict austerity and reform requirements to it. more>


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