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Mon Jan 23, 2012, 12:58 PM

Analysis: History repeats itself in euro crisis debt spat

(Reuters) - There are weeks when it can sound as if the European sovereign debt crisis is going round in circles.

Barbed exchanges between Italian Prime Minister Mario Monti and German Chancellor Angela Merkel carry echoes of a prolonged dialogue of the deaf between Greece and Germany two years ago when Berlin was resisting calls to bail out Athens.

Then as now, a debt-stricken government pushing through spending cuts, tax rises and economic reforms pleaded for lower interest rates and stronger European (read German) support to convince citizens the pain is worthwhile.

Now as then, a chancellor constrained by public hostility to bailouts and convinced only market pressure can keep profligate nations on a path of righteousness is turning a deaf ear, saying there is no need to act since no one is requesting aid.


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