The EU’s days of “kick the can down the road” are rapidly coming to an end.
While most commentators talk about the EU and its bailout fund as though these are independent entities, the reality is that the EU bailout story was always about whether Germany could foot the bill for the more bankrupt EU members.
For 18 months, German politicians were able to walk the line of supporting the EU without pissing off the German populace too much. However, starting in the last few months this balancing act has come to an end. Angela Merkel’s party has been getting destroyed in the elections.
We’re now starting to see German officials pulling back from the notion of more bailouts for Greece. When it comes to political suicide vs. ideology, politicians look out for themselves. And German politicians are realizing that with nearly 60% of their country wanting out of the Euro, continuing to throw money at the EU’s less solvent members means a guaranteed exit from public office.
In other words, the EU, in its current form, is at the beginning of the end. Consider the implications of Germany saying “no” to more bailouts.