Good Cop, Bad Cop

Analysis: Weidmann tries to muffle not spike Draghi’s ECB guns | Reuters.

This is a superior article on the political calculus from the folks at Reuters. If you have been following the eurocrisis, this article is a must read and pairs nicely with the article mentioned in my post from two days ago:

https://dareconomics.wordpress.com/2012/08/07/the-italian-situation/

Weidmann knows that a PIIGs default would destroy the eurozone resulting in a recession/depression. Therefore, the Bundesbank has to allow intervention to take place while simultaneously objecting to intervention in order to maintain the good will of the German people. He is aware of Merkel’s endgame, a United States of Europe under German leadership. As a former economic advisor to Merkel, he will continue to play his role in support of this goal.

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