Merkel: Germany ‘too weak to withstand more stimulus’

I have been saying for some time now that Germany is concerned about its own public finances. So it is good to see that Angela Merkel is now confirming this. According to the Telegraph, Merkel believes that Germany simply doesn't have the economic strength to launch a stimulus package to counteract the austerity now ongoing elsewhere in the periphery. This is significant because it drives not just the adjustment process in Europe but also the perceived need for bail-ins and private sector involvement.

Now, Germany launched a massive stimulus round during the 2009 crisis, over 50 billion euros worth of stimulus including dubious measures like cash for clunkers. Moreover, Germany's regime of automatic stabilizers is more robust than it is in the United States as the social safety net in E...

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