Wednesday, December 24, 2008

An economic sonderweg for the 21st century?

As Gordon Brown and Nicolas Sarkozy go on a spending (not to mention PR) spree to avert recession and organize Forums to convince the world of their sound judgment; as the economies of the EU periphery start looking towards the IMF and Brussels for help; as certain politicians in my native Greece and elsewhere, have started realizing that the Euro is no panacea for creditworthiness and have started muttering pleas for Eurobonds; Germany is having a relatively quiet and drama-free Christmas. Last time the Germans were so obviously the gatekeepers of prudence, in the early 1990's, the rest managed to lure them into the EMU through endorsing unification and accepting a Central Bank in tho mold of the Bundesbank. Now what chips do they have on the table? I have a feeling the Germans will remain unfazed:

A former economic adviser to the commission, Belgian economics professor Andre Sapir, says: "The message that Germany has to pay more because it has room for manoeuvre is not a very credible message".

But, I say, that is the way the EU has been run for the last 50 years. "Yes, but I don't think that is the way Europe is going to work for the next 50 years. It's true that Germany was the paymaster because of the past, the war, and the view that what is good for Europe would be good for Germany. I don't think that Germany should be made to pay forever for its sins. They were great, there's no doubt about that, I lost all four of my grandparents to the Germans, but Germany doesn't need to pay forever. Europe cannot be Europe if Germany is put in one corner and has to pay forever for the sins of the past."

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