- "Remembering the traumatic experience of the 1920s and '30s, the great majority of Germans sincerely believe that it is absolutely essential to prevent:
• fiscal deficits, which can result in forced monetisation, and which divert savings to the detriment of companies;
• the monetisation of public debt (monetary creation), which inevitably leads to spiralling inflation;
• Inflation, which is destructive for society by despoiling savers."
- "One can therefore understand Germans' reservations regarding:
• the euro zone if there are no strict budgetary rules; without such rules, countries other than Germany could have excessive fiscal deficits that the ECB would in the end have to monetise; Germans' savings would be used to finance the fiscal deficits of the other countries;
• the monetisation of public debt by the ECB;
• the loss of competitiveness of the other countries which could, at fixed exchange rates, push up inflation in Germany."
- "The need to prevent the destruction of the euro zone (in particular due to sovereign defaults) and the need to accept different productive specialisations in the other countries therefore face resistance in Germany, because they force it to accept developments (monetisation of public debt, divergence of wage costs and trade balances) that it normally rejects."
Natixis Flash Economics 324 20100623
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