Are the Germans Going to Crash the World Economy?

As Greece squeezes by without a “Grexit” — earlier this week eurozone ministers approved a four-month bailout extension— markets, politicians, pundits are far calmer today than they were a few years ago. Back then, in the fall of 2011, the prospect of a eurozone without Greece sent global markets into turmoil. Granted, it was bad year, what with a near-U.S. debt default and pervasive fears of a European Monetary Union undone by mountains of bad bank debt. By late November 2011, international credit markets were exhibiting the same danger signs of stress that followed the collapse of Lehman Brothers in September 2008, and it appeared that the long-feared next stage of a global financial implosion was at hand. It took the simultaneously actions of the world’s central banks, followed by a “final” bailout of Greece by the “troika” of the IMF, the European Central Bank and the Eurozone countries to the tune of 240 billion Euros.

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