Speaking to ongoing tensions between the Bundesbank, Bundestag and EU, including Germany’s implicit discouragement of Spain using the ECB’s bailout fund, The Economist’s Charlemagne columnist writes that:
Stitch by stitch, Germany is unravelling the carefully knitted deal that offered the euro zone the best chance yet of overcoming its crisis.
Following the long-awaited German Constitutional Court ruling that the ECB’s ESM could be ratified by parliament, political actors, notably Jens Weidmann, have worked to reel in the ECB’s possible actions. In Charlemagne’s view, Germany is accountable for rising tail-risk in the currency zone:
Rückfall, the German word for backsliding, is one reason the euro zone is being pushed back into an acute phase of the crisis.
Read the full piece here.