In Greek crisis, tips on German psyche
A few weeks after Lehman Brothers went bankrupt and the world plunged into a financial crisis, Chancellor Angela Merkel of Germany offered some common-sense advice to reckless bankers, indebted consumers and profligate governments.business Updated: May 04, 2010 21:35 IST
A few weeks after Lehman Brothers went bankrupt and the world plunged into a financial crisis, Chancellor Angela Merkel of Germany offered some common-sense advice to reckless bankers, indebted consumers and profligate governments.
“One should simply have asked a Swabian housewife,” Merkel said during an address in December 2008 in the southwest German region of Swabia, hub of the Protestant work ethic. “She would have told us her worldly wisdom: in the long run, you can’t live beyond your means.”
Now, as Europe struggles to avoid its own Lehman experience — saving Greece and thus the euro — the episode says much about the Germans.
Led by France, European neighbors have been pressing for months for Germany, which has the Continent’s biggest economy, to throw its financial weight behind a bailout package and a new system of economic governance for the euro zone. A reluctant Berlin has been called irresponsible, selfish and even un-European.
But if France wants Germany to be more European, Germany wants Europe to be more Swabian.
The Greek episode has heated up the long culture clash between the European Union’s traditional drivers: federal Germany with its Prussian attachment to rules and an instinctive frugality rooted in past economic traumas, and republican France with its tradition of state intervention and a more Mediterranean attitude toward public debt.