German chancellor Angela Merkel insisted Thursday that the only option for the European Union is to implement the austerity measures passed last year, and growth can only come through debt reduction, not more borrowing. “Growth through debt would throw us back to the beginning of the crisis,” Merkel said at the Bundestag. While a Guardian poll shows that a majority of Brits think it’s inevitable Greece will leave the euro, French bank BNP Paribus calculated that a Greek exit from the euro will immediately wipe 20 percent out of Greek GDP and send inflation soaring 40 to 50 percent. But things were looking brighter in another troubled EU country: Spain, whose stocks rose Thursday on the news that the government planned to nationalize the country’s fourth-largest bank, Bankia SA.
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