In a column for Bloomberg View--EU Pact Could Make Germany's Nightmare Come True--I try to make sense of Germany's approach to Europe's financial crisis. I can't claim I succeed.

With the golden rule [which at Germany's insistence caps structural budget deficits at 0.5% of GDP] in place, the EU's next economic crisis will be an interesting moment. The best and (let's hope) likeliest course for the EU would be to suspend the rule or abandon it outright. That, presumably, is something Germany would resist. Why propose this rule in the first place if you are going to have to abandon it as soon as it starts to pinch? The alternative would be to let the pact stifle recovery and drive up unemployment -- much as the EU's dithering has done in the present emergency, only more so.

Let's suppose that Europe muddles through this time. Next time, with zero fiscal flexibility, persistent underperformance in many parts of the EU, and an ever-widening gap between incomes in Europe's core and its periphery, a stark choice will present itself. Let the euro area and the single European market dissolve, which would be a disaster for Germany as for everyone else. Or form a transfer union that puts German taxpayers permanently on the hook for the EU's backward regions, which is the very outcome that Merkel dreads most.

How do you say "pretzel logic" in German?

I think it's Salzbrezel-Logik.