She's got a fairly detailed analysis on why she thinks this is true. Her argument is interesting and reads like a soap opera of federal bankers, but she doesn't offer tangible proof just analysis.
So, what do you guys think. Does Germany aspire to be like England and re-introduce their old currency, yet still belong to the european union. Or do you think that the collapse of the euro will be because a country like greece gets kicked out.
Personally, I think Germany will abandon the euro currency before they allow countries like Greece or Portugal to abandon the currency and not assume their obligations to the ECB. I just don't think Germany wants to be stuck within the eurozone married to an ECB that is being pirated by the PIIGS.
One argument that I think is very compelling and generational: is the notion that she believes that the german people will not allow their hard earned tax dollars and surpluses to be used for bailing out a faulty financial system. In other words, Germany radically refuses to write a check. that's why the EFSF would depend on china to bail them out, or this week the latest rumor suggest that the IMF might be the 600 million dollar sugar daddy. In either case Germany is buying it's time as they are printing Deutsche Marks. Germany will bail out Germany, not the Euro.
The nationalization of the German banks, or the creation of a purely German Bailout mechanism, will immediately cause the markets to blow out the spreads on all debt instruments around the world with the possible exception of certain G7 countries like the US and the UK
http://bit.ly/tdbPUuWhat Germany cannot do is accept monetization of the debt. The social contract between Germany's citizens and its leaders preclude this option given their history.
If the ECB under the new leadership of Mario Draghi buys so-called PIG bonds or attempts to print money, Germany will feel it has a central bank that has no "rules" and which simply serves as a blank check to the other member states. This means permanent price instability. If the ECB refuses to monetize the debt and no other white knight can be found (the IMF cannot fill the hole, Germany and China won't fill the hole, Tim Geithner would love to but the American public won't permit it, and the idea that the G20 can do it provokes howls of laughter from G20 government officials), then multiple sovereign defaults will occur well beyond Greece. The Greek default will continue with new haircuts leaving investors lucky to get 20 cents on the Euro. That would mean a substantial fall in the Euro and no possibility of recovery until the last element of default was done. That will feel like permanent price instability to the Germans.
Either way, Germany will find itself hostage just as a skilled and prepared mountainclimber might find himself fully locked onto the mountainside but his colleagues are dangling in the wind. National interest will demand self preservation no matter how much Germany might like to keep the climbing team together. They don't want to cut the rope but they may be forced to.