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2) Let the peripheral countries drop out of the system.
But other peripheral countries have not done as much.
But without Germany's help, peripheral countries were in trouble.
It defies the web of blame that Europe has woven around the unhappy "peripheral" countries.
Positive scenario (15% probability) The issuance of eurozone eurobonds to help fund the peripheral countries.
This is the trap that Europe's peripheral countries are in.
There would be a run on banks in peripheral countries.
Meanwhile, all the peripheral countries have big liabilities.
Firms are pulling deposits from peripheral countries' banks.
Companies from peripheral countries can fall into several traps, which we call liabilities of origin.
Europe's stock markets have closed with losses across the board -- particularly in the peripheral countries.
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