In Europe's seemingly endless debt negotiations, Berlin would seem to hold all the cards. It is, after all, Europe's largest economy, its most powerful and its most financially sound. But in reality, Berlin's options are highly constrained and require a remarkably delicate policy balance. On the one hand, Berlin, as the eurozone's pay master, seeks fiscal austerity to ensure that its money and aid go to good purpose, to alleviate future financial strains.

At the same time, it dares not push austerity too hard. Its clear self-interest in preserving the eurozone makes it loathe to risk the departure of any member, much less dissolution. That balance has appeared in past negotiations and almost certainly will in future ones as well. Though the outcome remains uncertain, Berlin's continuing strong commitment to the zone's integrity surely increases the probability that in the end, the euro will survive.

Berlin's seeming passion for austerity is an easy call. As the eurozone's biggest member by far, it knows that it will bear the bulk of the expenses for the rescues or bailouts or aid or whatever the European diplomats prefer to call the spending. Like any financiers, Germany's leaders want control of how the funds are used to ensure a favorable return—in this case, a resolution of the problems rather than prolonged profligate fiscal and banking behavior.

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