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2/27/10

Germany's frugality bemoaned for inhibiting euro zone growth - by Anthony Faiola

Greek extravagance touched off the biggest crisis in the 11-year history of the euro. But the world's most ambitious monetary union faces a less obvious problem that might be even harder to lick -- German frugality.

Adoption of the euro a decade ago ushered in an era of cheap credit, soaring salaries and big government in nations like Greece, Spain and Portugal. Their debt-fueled splurges are now coming home to roost, with Greece the first to come close to running out of cash to operate the government, raising fears of a default. Germany -- Europe's economic powerhouse -- is expected to take a leading role in a rescue effort to prevent a possible run on the euro and the outbreak of a new bout of turmoil in global bond, currency and stock markets.

Southern European profligacy is now the target of open distain in Germany, with many here ruing the day in 1999 that this nation of 82 million kissed goodbye to the once-mighty deutsche mark.

Note EU-Digest: It is certainly is not bemoaned by serious Europeans who want the best for Europe. It's not important what the US financial community thinks. They are the cause of problem and they still have not been regulated.


For more: Germany's frugality bemoaned for inhibiting euro zone growth - washingtonpost.com


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