[Finner]

From td economics:

It seems that every week that the European crisis goes on, a new record is broken. This week, government bond yields
in the United States and Germany broke through their previous historic lows to even more historic levels. In Germany, the 2-year government bond yield actually fell negative. In the U.S. the 10-year bond yield has breached the 1.5%
mark, a level never seen in the 200 years that data has been recorded. Government bonds of safe-haven countries have turned into the equivalent of Brink’s trucks – investors are willing to pay a premium just to get their money back in a few years time. In Germany’s case, it’s “most,” not “all” of their money. We are truly in uncharted territory

Greece is the canary in the coal mine for the adjustment, but that particular canary has already shuffled off his mortal coil. So long as a large divergence prevails between the periphery and Germany on what constitutes appropriate economic policy, Germany will insist that Spain, Portugal, Ireland and Italy go deeper into the austerity mine so that those canaries too will join the choir invisible. There are five possible ways out of the European sovereign debt crisis and current account imbalance through: growth, inflation, austerity, fiscal union, and default. Germany sees a fiscal union as a distant ideal and in the near-term, is attempting to block inflation, favouring austerity and default, which rules-out growth. Austerity in a currency union implies painful and politically intolerable austerity to get internal exchange rate adjustment through lower wages
and prices.

At the end of the day, Europe needs to decide if it wants to keep the euro. If so, then a fiscal union will have to be
established in some form. And, this will require financial transfers from Germany to many of the others – not just now, but on an on-going basis. This is the experience of most other federations. Germany also has to acknowledge that
its economy has benefited for years from a weaker currency and lower interest rates than it would have experienced if it had not been in the euro

Interesting times indeed. Everytime it seems to get better, it gets worse.