Recommended reading: Marc Levinson's "An Extraordinary Time - The End of the Postwar Boom and the Return of the Ordinary Economy" or my title: Why leaders try variations of the same thing and wonder why it fails every time. Link to Barnes and Nobel book store.

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The Euro Without Common Taxation

A central bank buying local bonds is the same as taxing the wealthy areas and tranferring money to poorer counties for the purpose of creating demand for the products of the wealthier countries - provided the loans are not paid back.

Without the transfer of this wealth to the consuming countires the consuming countries would need to a local curency devalued as needed to prevent things like manufacturing leaving for lower cost areas - a great benefit to the wealthy countries.

Greece will most likely tell the loans to go away as the loans should have been transfer payments and go back to the Dracma which gives them control over their economy. They really don't have a choice and neither does Germany as they want/need the consumption of the Greeks.

Also expect the Greeks to wrap the history between Greece and Germany around the curent situation.

Two things doomed the Euro: movement of industry and TV where the Greeks looked at life in Germany and the U.S. and expected the Euro to produce the observed lifestyle. Now we have to have renormalization back to future.