Eurozone in trouble
Background
Who's afraid of the euro crisis?
What fears may be lurking in the minds of Europe's other leaders if Greece crashes out of the eurozone?Germany
Chancellor Angela Merkel
Took office:
22 November 2005
22 November 2005
Big fear:
Euro break-up
Euro break-up
Chancellor Angela Merkel appears to be holding all
the cards - she presides over Europe's strongest economy and strongest
government finances.
Any rescue of the eurozone therefore ultimately relies on German money. If Chancellor Merkel provides the money too readily, she fears weaker countries will keep coming back for more, while her own voters may lose patience.
But if she does not provide the money, she risks letting the euro fall apart, in which case Germany will face a catastrophe - massive losses on loans already provided by the country's banks, government and central bank to southern Europe, a collapse in demand from Germany's biggest export markets, and an angry political backlash from the country's closest allies.
She is trying to use her power, and the reliance on her country's money, to force through greater integration of the eurozone, reasoning that this is the only way to keep the euro together in the long-term.
Any rescue of the eurozone therefore ultimately relies on German money. If Chancellor Merkel provides the money too readily, she fears weaker countries will keep coming back for more, while her own voters may lose patience.
But if she does not provide the money, she risks letting the euro fall apart, in which case Germany will face a catastrophe - massive losses on loans already provided by the country's banks, government and central bank to southern Europe, a collapse in demand from Germany's biggest export markets, and an angry political backlash from the country's closest allies.
She is trying to use her power, and the reliance on her country's money, to force through greater integration of the eurozone, reasoning that this is the only way to keep the euro together in the long-term.
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22 June 2012 Last updated at 07:26 GMTCOPY : http://www.bbc.co.uk
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