For Germany to allow the unraveling of its currency would be economic suicide:
[I]t would be much, much cheaper for Germany to simply bail out Greece, Ireland, and Portugal outright (that would cost about 1,000 euros for every German man, woman and child in one swoop) than it would be for Germany to exit the euro zone (which would cost the average German 8,000 euros the first year and 4,500 euros thereafter). Bailouts are deeply unpopular in Germany, and for good reason, but they look like the cheaper path. Even Bernard Connolly’s estimate that it would cost Germany 7 percent of its GDP for several years to bail out all troubled euro zone countries, up to and including France, looks like a less-painful option at this point.
And yet, as we have seen, 80 percent of Germans would rather go down in flames than concede this is now the reality. Maybe Berlin is merely trying to secure the harshest terms for fiscal rectitude in the peripheral countries before finally agreeing to back the euro with the ECB. Maybe not. But this is arguably the most significant turning point in European history since 1989. And it will affect us all. Soon.
(Photo: German Chancellor Angela Merkel, Chairwoman of the German Christian Democrats, attends the second day of the 24th CDU Party Congress on November 15, 2011 in Leipzig, Germany. By Sean Gallup/Getty Images.)
The Dish 