German endgame for EMU draws ever nearer

From Ambrose Evans-Pritchard at The Telegraph.  As always, he is a little sensationalist, but after controlling for that factor, it’s still a worrying read.

Clearly, the Germans are losing patience with the foundering EU project, as well as the importunate southern states that are threatening to drag Germany into the quicksands of fiscal crisis.  Living in Germany, I can attest that these sentiments are fairly widespread.

I feel that the break with the EU bureaucracy will have to come about sooner or later.  It is a question of timing and the repercussions are unknown, but will probably be rather destabilizing.  Will the eurozone break up?  Will each country retreat into its own currency, or will we be looking at two currency blocks: a northern and a southern?  What will the implications for debt liabilities be?  And what about the sheer mechanics of switching currency?

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