Germany: Getting sucked into Eurodoom?

at 09:00 AM ET, 06/14/2012

It’s not Greece yet, but Germany is looking significantly less insulated from Eurozone shocks than before. UBS Economic Research flags a new warning sign:
(Markus Schreiber - AP)

Euro area bonds sold off [Tuesday] (hardly news) but this time markets seemed disinclined to distinguish Germany from others. A single day’s action is hardly conclusive, but yesterday at least saw Germany treated less as a safe haven and more as like any other province in the Euro empire.

Capital Economics, a London-based research firm, agrees that the tide may have finally turned for Germany, which could finally (finally!) force the country’s hand on the crisis:

In other words, the markets are starting to see bad news for the periphery as bad news for Germany too. If so, there would appear to be scope for this process to continue as the crisis deepens and the fork in the road to either fiscal union or break-up gets nearer.
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