The German Impasse

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The autumn of 2019 is a moment of anniversaries. The 30th anniversary of German unification has garnered much attention. Rather less remarked upon has been the ten-year anniversary of the eurozone crisis. It was in the autumn of 2009 that the Greek government shocked the world by announcing the scale of its budget manipulation.

Today the bond markets are calm. Greece recently issued debt at negative yields. But the politics of the eurozone continue to be turbulent and the unified Germany, by far the largest eurozone member, continues to be at the heart of it.

This year we have seen a battle over a budget for the eurozone. The decision by the European Central Bank in September to relaunch quantitative easing has proved highly controversial. Most recently the Germany Finance Ministry, headed by the social democrat Olaf Scholz, has launched an initiative to kick-start the negotiations over banking union.

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