With regards to the “What happens now?” question being thrown around the Euro countries, Eigendorf deems both the idea of an enlarged rescue package and common Euro-bonds as “madness”. He argues that Germany would then be responsible for other European countries in the eyes of the law, “thus undermining both the Maastricht Treaty and the German Federal Constitutional Court”.
Eigendorf notes that possible moves would also “collectivise responsibility for wrongdoings, and probably only postpone the bitter end and worsen the final fiscal fiasco.” He adds that
German politicians must be aware that the solvency of their own state is finite. At the latest, if Spain is rescued, the imbalances in Italy, and probably also France, will be calculated.These, he argues, are burdens already borne by the German taxpayer, and
the more the federal government gets involved in the collective liability, the larger and more transparent the costs to the general public are. From a political point of view, it won’t be endured for long.Finally, he comments:
The Merkel government can hope that the current crisis management works, that the markets calm down and countries see reason on fiscal policy. That is possible but it is not probable. Instead, there is the alternative of deeper political union, which doesn't look realistic, or an orderly unwinding of the euro zone to fewer, relatively economically solid countries. Even if a government leader should not speak loudly about it, that is exactly what Chancellor Merkel should now prepare for.Strong stuff...