Everyone is carrying on about Spain being the next domino to fall in Europe. The crisis in Spain, the euro zone's fourth-largest economy, is regarded in financial markets as the acid test for the survival of the European common currency. That's why Spanish, German and EU policy makers are now locked in talks trying to work out how to recapitalise Spain's banks which are basically broke. Somehow, everyone has overlooked Germany.
Achtung baby, says the Zero Hedge blog, Germany is riskier than you think. The cost of keeping the Eurozone together will cripple Germany. According to its calculations, Germany will lose 1.31 trillion Euros if the Eurozone breaks up. And if it stays together? It will lose a paltry 579 billion Euros. That would cripple it.
And the German economy is in no condition to take that sort of hit. Reuters reports that German industrial orders have fallen at their fastest rate since the end of last year. The German economy is dependent on exports so any drop off in orders from stricken countries like the US and other parts of Europe will have an impact. As Der Spiegel tells us, the German economy is now so battered that it can't save the Eurozone. The only way is for a true union, a Federation of European states with members giving up sovereignty.