Germans left in dark on cost of saving euro
Published 02/09/2011 | 05:00
GERMANY is suffering from a serious case of cognitive dissonance. The country desires two conflicting things. On the one hand, it wants the euro to survive. But on the other, it wants to avoid a debt union in which Germany would help to guarantee the borrowings of other eurozone nations. The problem is that the financial markets are making it clear that Germany cannot have both. Without a guarantee that Europe's strongest economy will stand behind the debts of the weaker nations of the currency zone, investors will not lend to those states. And if the likes of Greece, Ireland, Portugal, Spain and Italy cannot borrow on the financial markets, then the single currency will inevitably break apart.
Some might find it hard to believe that the German people really want the single currency to survive. But it's true. I have just returned from two weeks in Hamburg and Berlin. I failed to find a single person who was sanguine at the prospect of the euro breaking apart. Rightly or wrongly, the German people regard the single currency as the crowning achievement of the post-war European project.
German Chancellor Angela Merkel summed up the nation's view in May last year when she argued: "If the euro fails, Europe fails, the idea of European unity fails."