Merkel is a short hand for German policy, since it is not confined to The Frau who is only one of the cogs. The problem, it would appear, is a great lack of imagination in the German mind set, an addiction to following the rules come what may (without ever questioning these rules, who made them and why), and a total and utter conviction that they are the ones who are always right, and that if we could do it, so should everyone else in the same way.
It has by now been extremely well analysed why the German austerity appears to have worked, what the circumstances were and how none of this bears any relation to the economies of the European periphery and the nature of their economies for one.
I do not intend to go into all that again here. But the trouble is that owing to this rigid and narrow mentality not only Europe but the global economy as a whole has got itself into a godawful mess, one Germany not only has no idea how to get out of, but insists on more of the same toxic medicine instead of trying to see what the real problems are and how to go about solving them.
Why? Well the answer is simple really and can be attributed to what I perhaps ungenerously describe as a total lack of imagination. German policy makers mostly cannot see beyond their immediate narrow interest. Which in the end may turn out not to be in their interest at all, but they do not appear able to see beyond their immediate shot term interests, and the repercussions their policies (imposed on others) will have.
They cannot cope with something different, with opposing attitudes or analyses or even with trying to imagine all worse case scenarios. No. There is only one way and that way is their way, and everybody should behave like little Germanies. We need not go any further in debunking this rigid dogma than by innocently pointing out that if every single country in the EU must achieve a budget surplus every year, then where is this surplus going to come from without corresponding deficits?
In his column in the Financial Times Martin Wolf states and I quote:
“The eurozone crisis is not over. Despite the emergence of a degree of stability, the situation remains very fragile. The ECB might in fact be able to do very little about this. That is partly because the measures it would need to take are controversial. It is also partly because of the view held by some that its job is to stabilise not the eurozone but the German economy. That is not a European currency union. It is something quite different.”
And that is the fundamental problem which constitutes a time bomb ticking dangerously close to the explosion. The whole EZ mechanism is geared to serving Germany’s interests and Germany’s interests alone. The tragedy is that this will lead, is leading, directly to an explosion that will most certainly not be in Germany’s interests at all. But by the time they can wrap their mind round that one it will be too late.