The European Union held a summit meeting last week, prompting a significant rally in both European and American markets at the perception of progress in controlling the Euro meltdown. However, it’s difficult for a sober analyst to find anything of long-term significance coming out of the summit. Spain got a vague commitment to pump bailout money directly into its banks, instead of handing the Spanish government a pile of rescue money with “austerity” strings attached, but no one is terribly clear about where this bank bailout money will be coming from.
Post-summit euphoria has already begun to fade, and it fades nowhere more swiftly than in the nation that glumly supposes it knows damn well where the bailout money will be coming from: Germany. It is increasingly clear that the entire Eurozone is powered by a long extension cord, patched here and there with austerity duct tape, running all the way to Berlin.
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