The EU bailout of Greece has laid bare important truths about the eurozone. When the chips were down, it was Berlin that blinked, not Athens. The strong proved not so strong, and the weak not so weak.
Why did Germany cave in? Because Athens’ insistent demand for a bailout called Germany’s bluff that the benefits from eurozone membership are a one-way street from north to south; that it was tired of being Europe’s 'paymaster'; and that Greece risked being kicked out of the euro if itcouldn’t get its act together without a default.
By agreeing to the bailout, Germany has been forced to admit a great deal of this was nonsense — that it could no more tolerate a Greek default, or expulsion, than the Greeks could, and that being Europe’s paymaster does indeed have its benefits.