Quote Originally Posted by gaelic cowboy View Post
How can Germany lose though your original assertion was that Germany is OWED money when in fact they have really been paid. The only thing they have to worry about at all is that no one leaves and if they do there target 2 is larger than there share. Now this essentially means Germany must have a contiually weak Euro to ensure continued trade with EZ economies, naturally this kills the other economies through deflation requiring bailouts.
As you have so eloquently pointed out if a country leaves the euro "the ECB may require all member states to pay for the shortfall as per there share of the overall ECB". Well the Spanish and Italians can't pay and France is not too healthy so who makes good the shortfall?

As for the printing money option the ECB tried that with the LTRO 1 and 2 cash injections into banks. The banks then bought their Governments debts and now face massive losses. Germany, for historical reasons (the hyper inflation of the 1920s) will not alow the ECB to print endless money. Mario Draghi says it is not the job of his institution to sort out the finances of EMU states. Its task is to ensure "price stability" ie. inflation.

It now transpires that the Spanish bank bailout is to be guaranteed by the sovereign so in effect it was a 'full fat' bailout just that the bailout money doesn't take precedence over other investors (as it did with Greece). Spanish papers say Spain may leave the euro but no doubt this is a threat for softer terms.