Merkel’s quandary

Storms have gathered over Angela Merkel’s summer. The FT reports that she faces a revolt in the Bundestag over the recent Greek debt deal. Some members of the Christian Democrats, her own party, and the Free Democrats, the junior partner in her governing coalition, will oppose the proposed expansion of the EFSF. Disparate political dissent has solidified around the European Central Bank’s decision to recommence buying Spanish and Italian government bonds, which will devalue sacrosanct German bonds. This is just one subject covered in a typically extensive Vanity Fair  examination of current German attitudes to politics, money and the Eurozone.

Merkel’s political crisis has grown from the emerging resentment in Germany about the cost of keeping the Euro’s more dissolute members in clover. This is allied to the universal difficulties of re-imposing fiscal discipline on public finances. These factors have combined to shake the popularity of the two governing parties.