Germany keeps being told that it must pay up to save the euro. But how much can Germany pay? No one seems to have thought about that, but there is already concern about the possible size of the bill. German bond yields rose soon after news of the Spanish bailout, even before it was announced where the money was going to come from. (And it was a bailout for Spain, regardless of what Spain’s prime minister says. If I borrow money and then lend it to someone else, I’ve still borrowed it.)

There is though a more basic question. How much does it make sense for Germany to pay? What sort of bill would it be reasonable to present to them? In fact the best approximation one can arrive at is a bill of zero.

Why zero? What about all these exports that have been produced because Germany has a currency whose value is determined not just by Germany but also by less productive, higher cost, economies? That link has artificially depressed the prices of German exports. These net exports resulting from Germany’s eurozone membership are actually the problem.