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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.

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