Alexis Tsipras

It is going to take some time to understand the real ramifications of the result of last weekend’s Greek elections, but here’s an interesting hypothesis: rather than profligate Greek public spending being behind its sovereign debt problems and acting as the seed for the Eurozone crisis, the root cause is actually Germany’s addiction to its export economy. According to this analysis, Europe’s largest economy exports around 50% of GDP, a level that is supported only by its membership of the EU, with its free-trade zone and common currency, and overseen by regulations from Brussels. “The loans German banks made to countries such as Greece after 2009 were designed to maintain demand for its exports. The Germans knew the debts could not be repaid, but they wanted to kick the can down the road and avoid dealing with the fact that their export addiction could not be maintained.”

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