Has Germany been prudent or short-sighted?

by Robert Peston

BBC News
October 26, 2011

It was billed as the eurozone leaders' package to prop up their currency union.

In practice many would see it as the German plan because:

1. it was Germany that pushed hardest for banks and private sector lenders to the Greek government to take a 50% cut in what they're repaid;
2. it was Germany that placed a strict limit on the expansion of the resources of the bailout fund by vetoing the deployment of the unlimited resources of the European Central Bank;
3. and the imposition of strict new budgetary disciplines on governments perceived to be borrowing too much is a manifestation of Germanic fiscal rectitude.

Also what may gall some is that German banks even got off relatively lightly from the measures to strengthen European banks - since they're being forced to raise a relatively paltry 5bn euro in new capital.

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