The Lehmann
Letter (SM)
It’s easy to
characterize Germany as content, self-satisfied and disdainful of its southern,
debt-plagued neighbors.
But Germany
has been a builder, not a wrecker since WWII. This letter believes Germany will
continue to fulfill that activist role.
Germany is not fiddling while Rome and Madrid burn. And it’s not
just that Chancellor Angela Merkel must please her constituency. Germany has a
record of putting its money where its mouth is. Germany not only apologized to
Holocaust victims; it offered restitution. When West and East Germany unified
20 years ago, the West created a fund to rebuild the East. Germany then paid $1
trillion to do so. That’s right: ONE TRILLION DOLLARS. That’s a lot for a
nation whose economy is much smaller than ours.
Germany has already paid substantially to bail out southern
Europe. But it knows the price of putting its money where its mouth is. So
Germany wants to be sure that any further assistance will include measures that
further unite the fiscal and monetary policies of Europe. That seems
reasonable.
In that light consider these articles in this morning’s New York
Times:
Germany Is Open to Pooling Debt, With Conditions
E.C.B. Under Pressure to Ride to the Euro's Rescue
Here’s
the last paragraph of the first article:
“’Merkel is slowly adapting to different times because she is
afraid of not jumping on the train in time,’” said Stefan Kornelius, foreign
editor of the German newspaper Süddeutsche Zeitung. “’She doesn’t want to be
the gravedigger for the euro.’”
That’s
not a description of an obstructionist.
Now
read these paragraphs from the same article:
“Pressed by a banking crisis and turmoil in the markets, Germany has indicated that it is prepared to accept a grand
bargain that would provide greater support for its most indebted euro zone
partners in exchange for more centralized control over government spending in
Europe.
“’The German chancellor, Angela Merkel, said that finding the way to “more Europe, not less’” was
the next task for Europe’s leaders. “’The world wants to know how we expect the
political union to complement the currency union,’” Ms. Merkel said at a news
conference here Monday with José Manuel Barroso, the president of the European
Commission. “’We have to find an answer in the foreseeable future….’”
“The worsening crisis has led to a sweeping effort to chart a new
path forward for the (European) union, one that encompasses fiscal integration,
Europe-wide banking supervision, and tighter coordination of economic policies.”
That’s a builder, not a wrecker.
The same is true for Mario Draghi, president of the European
Central Bank. Take a look at these lines from the second article:
“…Last week, in a rare
public rebuke to the region’s elected officials, Mr. Draghi outlined the steps
he said were necessary to strengthen the euro
currency union, including requiring member nations to take shared
responsibility for bank bailouts. If he walks this tough talk, the central bank
might not take action until political leaders have made tangible progress in
that direction.
“To
help leaders head down that path, the European Commission on Wednesday is
expected to propose steps toward a so-called banking union — measures that
would include requirements that nations set up funds to deal with failing
banks, with the money possibly shared by countries, and give the national
authorities greater scope to intervene in troubled banks.”
Europe
has forged a stronger union in response to past crises, and can do so again.
© 2012
Michael B. Lehmann
