FT.com / Comment / Opinion - The message from Berlin that Europe failed to grasp.
The Germans are at the heart of solving the Greek financial crisis, which is really a European and not a Greek issue at heart.
Many Germans want to blame the Greeks for financial irresponsibility. They'd be unwise to do so. The Germans have their own problems too. As the FT reports:
The situation at the level of [German] municipalities is truly dire. In North Rhine-Westphalia alone there are 19 cities fighting to avoid receivership. The problem afflicts not affluent D?ºsseldorf, but the likes of Bochum and Dortmund, Essen and Duisburg. Once synonymous with world-beating German heavy industry, they are now sinks of high unemployment, mounting social costs and plunging tax revenues.
To tackle this the German Federal State is demanding balanced budgets.
This fiscal conservatism will destro Greece.
It could destroy Germany too.
We know such economic policies can drag Europe to its knees and beyond. They did in the 1930s. Why are we risking a repetition?
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The idea of the ‘virus’ of economic disaster spreading across the EU is a truly frightening one, the repercussions would be totally devastating
It isn’t fiscal conservatism, but Western economies / societies used to high cost social and welfare programmes at a time when their economic superiority is under threat from lower cost economies elsewhere.