Germany has quietly enshrined in its constitution the requirement that a near-balanced federal government budget be achieved by 2016 and sustained thereafter. As Germany is the most powerful economic and political entity in the eurozone, it will insist that other eurozone members apply fiscal probity as well. This means a fiscal and monetary war.
That war has begun. The new Greek government is in big trouble. It has inherited a massive 12.7% of GDP budget deficit and an 11% of GDP current account deficit.
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