The Americans say go for it. So do the English. They want Germany to take on Europe and be responsible for all its bond issues. They want the Germans to forget about ever being German and to think like an Englishman or an American. That way, by showering everybody with money and aid, they will awaken that spirit of being equal and the same — God is an Englisman, Everybody loves an American — in every country in Europe.
The Germans say wait a minute. Look how messy your economic situation is, America. Ditto England. We think we Germans have a better idea. We want to be stricter. We want to enshrine low inflation as a god. We want to put a balanced budget above all things. This is thinking like a German. We don’t necessarily have to spread this kind of thinking around the globe. It may not be for everyone. But if anybody wants to play our game with us, they have to become like us, Germans. We are not willing to accommodate them in any way. They have to reform themselves.
This conflict is making headlines this week. Everybody in the EU, including France, wants Germany to become an American. But Angela Merkel says no. Wolfgang Schauble, Germany’s Finance Minister, says he’s willing to consider a “partial collateral” solution called “first loss insurance”. But he won’t go any farther. He says treaties would have to be changed to get the ECB to guarantee all bond issues by member states.
Instead he proposes guaranteeing only part of the bond issue, say 20%, which could be borrowed from the ECB.
The fact that the Greeks are marching in the steets in protest ahead of the Parliamentary vote for deeper spending cuts doesn’t concern Wolfgang at all. Nor does he care if the French lose their AAA credit rating. He thinks that the EU is Germany. The ECB is German, and the euro is the German mark. Everybody has to respect that, and in good time they will all become good Germans.