My belief has been that the Bundesbank is merely playing “bad cop” to the ECB’s “good cop” during this crisis. Then I read an article like this.
We tend to think of large organizations cynically, and we should. Always remember that the large organization consists of people. These people actually believe in the organization’s principles.
While Merkel may be playing bad cop with the PIIGs, it seems to me that the Bundesbank leaders fervently believe in a stable euro above all else. This makes sense, because Germany underwent a ruinous hyperinflation.
Hyperinflation is the death of the currency. When the mark died in the 20’s, it ushered in political instability and extremism that led to Hitler. Can you see why the Bundesbank will never change its mind about this?