@Joe,
I dug out this one:
http://www.alsosprachanalyst.com/economy/charts-eurozone-sectoral-balances-periphery-vs-core.html
There is no need for a growing public sector deficit if the “foreign country savings” flow is negative (Germany runs a capital account surplus).
NB the most striking observation when Germany is compared with Spain is the absence of private debt deleveraging in Germany. This is what has whacked the Spanish economy (a massive swing from private sector dissaving to saving caused by the bursting of the real estate bubble).
The trouble is that the Spanish savers (often the foreign sector) don’t want to spend from their stock of accumulated savings. But the Spanish debtors have to keep repaying the debt (or go bankrupt).
Money has to come from somewhere outside of the banking sector or saving desires will be frustrated by a shrinking level of the income.
