But at the same time the economy in Greece lags farther and farther behind its northern neighbors. They haven’t found private investments or jobs to make up for the shrinking public sector. It is the diametric opposite of Germany.
No later than July Germany wants to increase its interest rates to cool off an economy that might overheat. That would be bad news for Greece that needs stimulus and low interest rates.
The danger is not so much that Greece’s failing economy will hold Germany back. After all, the
economies of all the “pigs”: Italy, Spain, Portugal, Ireland, and Greece accounts for only 6% of the EU’s GDP. But there is a real political danger that cuts two ways. First the Germans themselves could get tired of paying for Greece. There could be a taxpayer revolt. The even greater danger is that Greece will drop out of the EU all together because of the unpopularity of the economic measures Germany has decreed. Then the tribute to Germany’s economic might, the euro, will fail.
After the defeats in the two world wars, Germany doesn’t want another failure laid at its door.
