Despite the so called “shock and awe” plan to solve the European debt crisis, markets remain jittery.

The initial response to the European plan was very favourable, as Europe presented a united front to keep the smaller Eurozone countries solvent.

Since then, the Germans seem to have been doing all they can to destroy that perceived united front, even going so far as to ban short selling in Germany without consulting anyone else first.

This ban has very limited practical effect, but is psychologically damaging for markets. The first question that springs to mind is: “What do they know that we don’t?” Markets are worried about problems, perhaps with European banks, that have not yet come to the fore.

The second question is whether Germany really wants to help its Eurozone neighbours at all?

One of the main effects of the German position is the dramatic weakening in the Euro. This is great for Germany, one of the world’s biggest exporters. It makes their goods cheaper to buy.

Some speculate that Germany wants to re-make the Eurozone in its own, export driven image. A cynic might say that all this turmoil is helping Germany achieve their goals. Coincidence? Probably, but I doubt the Germans are too upset by this particular side effect.