The euro traded above $1.30 on Wednesday morning, but faced pressure as German concerns threatened to derail the region's progress toward a unified banking system. The common currency traded at 1.3155 at 8:00 GMT on Wednesday.
When European Union leaders agreed to create a unified banking system back in December, Germany was always hesitant about accepting the new union with open arms.
Reorganizing the banking structure so that all of the bloc's banks are supervised by the European Central Bank was a proactive move to disentangle governments and banks and prevent the corrupt relationships that led to financial meltdowns in countries like Spain and Ireland.
However, Germany's Finance Minister Wolfgang Shaeuble spoke up last week to say the project did not have a solid legal foundation. In his view, in order to create the union, EU lawmakers would have to make changes to the EU's founding treaties.
Since the European Commission has already advised that such changes are not necessary, many think Schaeuble is dragging his feet in an effort to prevent the union from forcing German banks to give up control to the ECB and share the expenses of the eurozone's recovery.
It's no secret that Germany is fed up with footing the bill for expensive bailouts in order to prop up its unstable eurozone peers.
According to the Wall Street Journal, a statement from Germany's central bank showed that the nation's government debt reached 81.9 percent of the country's economic output, a level well above the maximum defined by the Maastricht Treaty. The central bank claimed that much of the nation's debt was coming from its contributions toward ending the European Sovereign debt crisis.
Of the government's 2.17 trillion euro debt, 45 billion was connected to German loans paid out to help mend the eurozone. Germany has been the largest contributor to eurozone bailouts and it has caused a sense of frustration within the country. Despite that, the German parliament is expected to approve the latest bailout package for Cyprus later in the week.
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