I am convinced that the next Merkel junior partner will be - unlike the current one - actually interested in doing what needs to be done to safe the euro. Both parties have some more or less promising plans to finally - after years of senseless misery - get something done. These include
- eurobonds (which now have a different name)
- a banking resolution mechanism that deserves the name
- at least reduced austerity in the periphery
- some actual attempt to increase investment
- (they also want to increase taxes in Germany which will not be helpful since Germany needs more domestic demand)
But it may be too late. We might just be in for the perfect storm next month. In Italy 87 of Berlusconi's People of Freedom party senate members are threatening to resign if he is removed from the senate next week. In that case new elections seem likely since the government won't be able to act anymore. They are probably the only ones who are on the level of Republicans when it comes to unpatriotic and destructive behavior.
In Germany, the Bundesverfassungsgericht will make a decision on the OMT program. It is not at all clear what the decision will be, the only thing that is certain is that the ECB itself will not be directly affected, but the Bundesbank might be. Many ordo-liberal economists want the promise that it holding the union together gone, they favor complete chaos over the ordo, I guess.
In Greece, a group of special forces reservists seems to be threatening a coup d'etat. They demand among other things that the government resign immediately. Well, I actually understand where they are coming from, the government signing a memorandum of understanding is the moment that sovereignty and therefore democracy dies in that country.The Greek government in particular is unable to do its job and even 8 Universities had to close recently. The incompetent troika negatively affects the live of all Greek citizens.
So we might just be in for a dysfunctional government in Italy, a coup d´etat in Grecce, while in Germany the constitutional court prevents the