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carl mortished

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The president of Cyprus wants another €6-billion ($7.9-billion) and he is writing to EU leaders asking for a rethink of the bailout to which the EU institutions and the IMF have already committed €10-billion. The cost of the rescue of the Cypriot financial system is rising, but President Nicos Anastasiades is unlikely to get another euro cent. If he has any doubts about this, he could do worse than attend the first conference this weekend in Berlin of Alternative fur Deutschland, a new political party which is campaigning for Germany's withdrawal from the euro zone.

This isn't a party of lumpen neo-Nazi xenophobes, but one founded earlier this year by a Hamburg economics professor, Bernd Lucke, and a group of like-minded German academics. He's not against the EU; Mr. Lucke's big idea is that the single currency is destroying the union because of the huge economic burden imposed on member states by a currency regime ill-suited to the EU's weaker economies. His solution is that the euro zone should be dissolved with the initial departure of the fiscally challenged Mediterranean states of Cyprus, Greece, Italy, Spain and Portugal. France would be next.

AfD's campaign to dissolve the euro is almost sacrilege in a country where devotion to EU institutions is part of being civilised, as well as an implicit acknowledgment by Germans of their debt to the rest of Europe following the Second World War. It was therefore a huge blow to Chancellor Angela Merkel when a recent poll suggested that one in four Germans were now sympathetic to the idea of ending the euro. It chimes with mounting impatience with bailouts of improvident Mediterranean states and anger about Germany's disproportionately large share of the economic burden.

The European Central Bank inadvertently blew oxygen on these smouldering embers last week when a statistical analysis of domestic finances in the euro zone revealed that the average Cypriot household is more than three times wealthier than one in Germany. The figures, which tended to reveal that southern Europeans were "richer" than northern Europeans, were heavily skewed by the value of property owned by households and differences in modes of living: Germans don't tend to own their own homes. Nevertheless, it only served to confirm German views that southern Europeans were lazy property speculators, addicted to debt and dependency.

Mrs. Merkel goes to the polls in September and while the runes suggest she will get another term, that may depend on how she deals witht the euro crisis. Any sign of weakness will draw even more support to Mr. Lucke's rebellious professors.

Carl Mortished is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights.