For a German living through the Greek crisis in Washington, these are heady times. From Ukraine to the southern shores of the Mediterranean, Europe is in turmoil. And for many Americans and Europeans, Germany is either the culprit or the solution, destructive demon or angel of salvation. It’s enough to give it superpower delusions. Or, as our French neighbors would say, folie de hyperpuissance allemande (German superpower madness). (Ok, I made that up, but I humbly offer it as an addition to the repertoire.)
The Germany-as-destroyer-of-Europe narrative gets a lot of traction these days—and not just from that doomsayer trio of economists Paul Krugman, Jeffrey Sachs, and Joseph Stiglitz, who blame a German fixation with austerity for Greece’s travails. We’ve seen headlines like: “Merkel may make Greece a pariah state,” “Germany—not Greece—will be the real loser,” and “Greek crisis shows how Germany’s power polarized Europe.” Not to mention articles lambasting the Germans for hypocrisy because they got debt relief and the Marshall Plan after World War II, or assertions that “Merkel chose the path of humiliation.” Cue the light brigade of lexicographic irregulars who rush in to explain that the German language uses the same word for “debt“ and “guilt.“ It doesn’t really. As they say in Washington: whatever.
There are still lots of Calvinists in the United States who feel that loans ought to be repaid and pensions earned. Yet it ought to give German Chancellor Angela Merkel pause when some of the few voices siding with her are two old lions of the American commentariat whose usually dim view of Germany dates pretty much from 1914: George Will (for whom European unity is a “misbegotten enthusiasm”), and Charles Krauthammer (who memorably remarked to Fox News that Greece is “living off the German tit“).
Indeed, on any given day, we see many of Germany’s talk shows, its right- and left-wing fringe politicians, and its daily tabloid BILD—which once suggested that Greece sell the Acropolis to pay off its debts—working hard to confirm the critics’ worst impressions.
Still, the Merkel government’s thinking is more nuanced than it often gets credit for. It is deeply rooted in the orthodox school of economic ordoliberalism, which holds that states should set rules for market forces and stick to them, that debt and deficits are a bad thing, and moral hazard is to be abhorred. (It’s also true that Germany for years defied the very rules it is now laying down for Greece.)
Yet there is more to Berlin’s thinking than austerity for austerity’s sake, than slashing costs and taking a chainsaw to state entitlements. The sovereign debt crisis, which began in late 2008 and swiftly sent Europe’s economies into a tailspin, rammed home the realization that globalization and deep economic integration have made Europe and Germany prosperous—but also vulnerable like never before.
Germany’s much-vilified insistence on structural reforms is based on the double insight that a dysfunctional domestic setup (pervasive corruption, failing institutions, and a skewed social contract) is itself a source of risk—and that the vulnerability of one EU member state endangers all others. It is the reason why so many other member states from the Baltics via Romania to Italy, Spain, Portugal, and Ireland have all undergone the painful discipline of reforms.
That, too, is a kind of solidarity: Europe’s countries fortifying themselves, and thus each other, against the next crisis. And it is why politicians and publics—except for populist movements hoping to gain leverage at home from a Grexit—in so many parts of Europe are so angry with Greece. In fact, based on conversations last month in Europe, Swedes, Poles, or Finns are at a loss to understand why the Germans are still trying so hard to keep the Greeks in the euro, given all of Europe’s other troubles. Syriza’s theatrics and its failure to undertake even minimal reforms haven’t helped.
The view from Berlin takes in geopolitics as well. Greece is Europe’s foothold in a neighborhood fraught with tension: the Balkans, Turkey, the Middle East, the Eastern Mediterranean, and North Africa. A stable, prosperous Greek democracy would be an anchor of stability in the region.
Last but not least, Merkel’s unyielding line on Greece is based on fear of her own populist challenge: the right-wing euroskeptic party Alternative for Germany (AfD). It has just made a sharp rightward shift under new leadership.
But the chancellor’s line is overly rigid and will have to change. Indeed, the German government has already been forced to accept changes it fiercely resisted—particularly the European Central Bank’s new role as a lender of last resort, and its policy of quantitative easing. Berlin’s policy shifts have often come a day late and a euro short. Worst of all, it failed to realize after the first Greek bailout in 2010 that Athens was incapable of undertaking the reforms demanded of it. Merkel’s refusal to adapt her demands accordingly has been quietly criticized even by senior politicians in her own camp.
A lasting compromise will have to be excruciatingly painful for all sides: it must involve real reforms, a debt extension or moratorium, jobs and growth programs. Europe will have to make changes to shore up the eurozone. The alternative would be disaster. Time for Angela Merkel to make that case to her citizens—and the rest of Europe.
[The recent Senate Foreign Relations Committee report on Russian meddling] is a thorough and comprehensive view of Russia’s decades-long political warfare against the West. The lesson learned from Europe, which has borne the brunt of Russian attacks, is that Russia can be deterred but that requires leadership. For that reason, this report would have sent a much stronger message to the Trump administration if it had Republican support. As is, it is an urgent warning and a call to action, but it may fall on deaf ears.