Should Germany Leave the Euro Zone?

Everyone is talking about whether Greece should remain a part of the Euro Zone. They lied with false financial figures to get in, their citizens (particularly the mega-wealthy) abhor paying taxes, they borrowed themselves silly and have no possible way of generating sufficient economic growth (hey, they’re contracting violently under the new austerity program) to pay back their $170 billion Euro Zone rescue debt. Under almost every perspective, Greece appears to have no viable way to avoid total economic collapse, whether they stay in the Zone or leave. Germans don’t seem to care if Greece falls, however, a notion that is being echoed elsewhere in the European Union.

Even IMF head Christine Lagarde noted she has more sympathy for the impoverished children of Africa that she does for the denizens of Greece: “International Monetary Fund Managing Director Christine Lagarde says she has more sympathy for deprived children in sub-Saharan Africa than for many of those facing poverty in Greece… Greek parents have to take responsibility if their children are being affected by spending cuts and ‘have to pay their tax,’ Lagarde said in an interview with the UK’s Guardian on Saturday…‘I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education,’ Lagarde told the newspaper. ‘I have them in my mind all the time. Because I think they need even more help’ than people in Greece.” Ekathimerini.com, May 26^th. Ouch!

Spain’s banking system is faltering as banks seek bailout funding from the government, and unemployment there has hit an untenable 25%. Italy and Portugal are shuddering under their austerity programs, and France’s newly elected Socialist President, François Hollande, has broken his nation’s lock-step-with Germany-austerity-march by announcing France’ new emphasis of growth over austerity. Germany’s insistence on austerity, her refusal to support any movement to relieve the severe results of austerity which were imposed on various nations as a condition of an EU bailout loan, puts her at odds with the vast majority of EU nations who are mumbling that the austerity mandate is a failure. Germany, with allies like Austria, the Netherlands, and Finland, simply maintains that it could take many years of disciplined austerity before the medicine effects a cure. And since their economy is the bastion of economic strength upon which the rescue packages are based, Germany still calls the shots.

Although two recent regional elections suggest that there are pockets in Germany which are sympathetic to lifting some of the most severe austerity requirements, the vast majority of Germans at all ages are baffled as to why Europeans actually expect them to put their economic well-being at risk any more – particularly in connection with lending their credit rating and financial guarantee to a Euro bond so that other profligate EU members get huge financial benefits (and get to borrow at sustainable rates) while Germans will instantly pay higher interest. The talk in the country is that somehow other Europeans are reaching into the past – where Germany fomented two devastating world wars that each destroyed the continent – to justify why Germany owes this economic sacrifice to the rest of Europe. For most Germans who weren’t even alive during such historical events, the undercurrent truly generates anger and bitterness.

Germany’s prestigious Goethe Institute found: “According to a survey carried out by infratest-dimap that was shown on ARD-Deutschlandtrend (ARD is a German public broadcasting station) three-quarters of all Germans feel that their affluence is being threatened by the euro crisis and the debt crisis. 80 per cent think that the worst is still to come.”

That German Chancellor Angela Merkel has supported the bailouts to date has not been particularly popular with her constituency, and there is great fear that her policies of seeming “generosity” (which other Europeans see as an obligation) will cost her the next election. While it is true that a collapse of additional European nations would seriously undermine Germany’s economy and its share of the euro, Germans simply are unwilling to consider such an eventuality at this time, preferring to press the profligate nations hard, maybe breaking a few along the way, until they are seemingly forced to act at the precipice of some future total economic collapse, a fact which has global markets supremely worried. Germans look longingly at their Swiss neighbors – forever independent – whose currency has appreciated over 20% against the struggling euro (also making Swiss products really expensive).

So the question comes to my mind, seldom discussed in the international press, that if Europeans feel that Germany owes them their economic support to be truly blending into the unitary economy that was significantly architected by Germany itself, and Germany is terrified of that blending because they are the largest and primary source of economic strength for the entire Euro Zone which may undermine their own financial wealth, maybe it is Germany that needs to leave the Zone. After all, in the last 100 years, no good has come from Germany’s being angry at the rest of Europe, and the rest of Europe (with a few small exceptions) being angry at Germany… and isn’t war today fought just as much in the arena of finance and trade as it is with guns and bombs?

I’m Peter Dekom, and this European struggle could easily send the entire global economy back into deep recession.