Assertive Germany now vital if euro debacle to be resolved
ANALYSIS: The euro as it was created has failed. What happens next is up to Germany, writes DAN O’BRIEN
WHAT DOES Germany want? The German question has rarely been anything other than a central strategic concern for Europe since that state’s founding in the 19th century upset the Continent’s balance of power.
It is again centre stage as the future of the euro hangs in the balance. Ultimately, Germany will have to decide whether to take on a greater role in Europe’s affairs and save the euro, or to turn in on itself and let the currency fail.
The reasons for Germany’s central role in European affairs are many. Demographically, it is second only to Russia in population size. Economically, it is second to none, and has enjoyed that status since it overtook Britain more than a century ago. Geographically it is at the Continent’s crossroads and shares land borders with nine countries, more than any other. Militarily, in its first 70 years of existence it went to war against almost all its neighbours, often simultaneously, and always with devastating consequences.
German aggression in the 1914-45 period caused distrust and suspicions which linger to this day. After the second World War, despite Germany having been ravaged by the conflict, carved in half and tightly contained by the superpowers, the fear that it would again rise up remained. “To keep the Americans in, the Russians out and the Germans down,” was the oft-repeated multiple rationale for the establishment of the North Atlantic Treaty Organisation (Nato)…
But the euro as it was then designed has failed. Its architects did not construct it to withstand an earthquake in the financial system of the magnitude that has been experienced. The edifice as it exists will have to be redesigned and strengthened or it will come down. What Germany decides to do, as the largest, strongest and most fiscally capable economy, will determine the outcome.