Could Germany back down? - Natixis

Analysts at Natixis explained 'how' Germany may back down as populists parties seem to have the upper hand in the next elections in the euro-zone. Hence, 'backing down' means a more flexible Germany to avoid what seems inevitable; the euro break-up.

Key Quotes

"Creating a euro-zone budget of significant size with its own tax revenues."

"Allowing fiscal deficits to remain high in the euro-zone countries in difficulty (if increases in efficient public spending or efficient tax cuts are implemented in return)."

"Shifting to a more expansionary fiscal policy in Germany (transport infrastructure, energy, etc.)."

"Agreeing to a continuation by the ECB of its quantitative easing programme despite inflation of close to 2% in the euro zone."

EUR/USD back below 1.0700, Fedspeak on sight