Word: euroland
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Dates: during 2010-2019
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...fiscal deficits of the PIIGS are among the highest in Euroland. Their unit-labor costs have risen faster than anywhere else. So their exports can't compete; hence they run some of the largest current-account deficits. What do you do when you shovel coal and run out of fuel? You borrow - as the PIIGS have done. The markets have cast their verdict on that. Now, Greece has to borrow at twice the interest rate that German bonds fetch...
Still, let's not praise Merkel the martinet too much. She has not acted out of pure selflessness. As the richest nation in Euroland, Germany would have had to pay the largest share of the bailout. And if the euro careens out of control, Germany would end up as the biggest loser. With the euro derailed, the new deutsche mark would be everybody's darling, driving its value up - not a cheery prospect for the world's second biggest exporter. (See video: "Globabl Business Trips: Germany...