The "it" referred to in the headline is the ongoing European agony over the terms to extend further aid to Greece. The Germans are objecting to terms that may allow for official loses on sovereign loans. What is painful to watch is that in fact Germany has been a major facilitator of Greece's slide into crisis. In fact, the persistent trade deficit that Greece runs with Germany and the rest of the world is a significant cause of the problem. Since Greece must import manufactured goods and exports agricultural products (and tourism) it sends many Euros out of the country.
If Greece had their own currency then the balance of payments would require much if not all of the funds to return to the country as asset purchases. However, since Greece is paying its bills in Euros the funds can flow back into any Euro Zone country causing net flows out of the country. Not until the economy becomes exceedingly depressed will the Greek competitive advantage be significant enough to generate capital inflows. (Oh Greece lets invest there because they work so cheap.)
Germany benefitted from the weakening of the Greek position because it provided a market of higher income consumers for its products. And now they are threatening the spigot that provides Greece's lifeline. Even this article which tries to condemn Greek public finance choices (tax is too low, spending too high) they clearly show how Germany has benefitted from the situation in the past. Shouldn't they participate significantly in rectifying the imbalances?
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