Euro Resentment Demands New Rules

Euroskepticism is abound anew. Where previously economist Paul Krugman argued that Greece could have weathered its fiscal crisis if it had retained its own currency, Judy Dempsey reports that Germans are increasingly nostalgic for their Deutsche Mark.

“For Germans,” writes Dempsey, “the mark was more than just currency.” It represented the country’s postwar recovery, the Wirtschaftswunder that made Germany within mere decades the strongest economy of Europe.

Should they be forced to bail out an ailing eurozone neighbor as Greece, Spain, maybe Portugal, “resentment against Europe and the common currency” would certainly intensify among most Germans.

Chancellor Angela Merkel is in a tough spot. “She knows that the euro has been good for Germany, despite the resentment.” Stable exchange rates have encouraged trade and growth. “But bailing out Greece would be terribly unpopular.”

So when European leaders last week pledged to support Greece should worse come to worse, Merkel insisted that no concrete aid be announced. She is playing for time, hoping that new measures demanding fiscal discipline will avert the necessity of investing billions of euros to shore up Greece’s financial mess.

Broader economic power in the hands of the EU was for long taboo with German goverments. All dreaded the prospect of France undermining the independence of the European Central Bank “by launching grandiose projects and social spending plans that would cost Germany dearly.”

Safeguarding the euro may require a new game plan however. No one in Northern Europe really wants to pay for the mistakes or outright breaches of treaty made by neighbors in the south. But a common currency implies a shared responsibility. Europe has every right to demand of all the member states that maintain the euro, that they protect its stability.