Merkel's policy under these circumstances was imposed on her by reality. Germany was utterly dependent on its exports, and its exports in Europe were critical. She had to make certain that the free trade zone remained intact. Secondarily, she had to minimize the cost to Germany of stabilizing the system by shifting it onto other countries. She also had to convince her countrymen that the crisis was due to profligate Southern Europeans and that she would not permit them to take advantage of Germans. The truth was that the crisis was caused by Germany's using the trading system to flood markets with its goods, its limiting competition through regulations, and that for every euro carelessly borrowed, a euro was carelessly lent. Like a good politician, Merkel created the myth of the crafty Greek fooling the trusting Deutsche Bank examiner.RTWT, which is very, very interesting.
Friday, August 10, 2012
How Germany caused the Euro crisis
This is probably the most interesting thing I've read on the Euro crisis:
Interesting take on that, regulatory capture by an entire country!
ReplyDeleteMy own take on the issue, from someone who lived in Ireland during the euro transition:
ReplyDeletehttp://borepatch.blogspot.com/2012/08/how-germany-caused-euro-crisis.html
When considering the breakup of any marriage, group of individuals or businesses, or alliance of countries, there is seldom, if ever, a guiltless party. Follow the money.
ReplyDelete