Berlin
It is no exaggeration to say that this week could be remembered as the week that Europe either pulled back from the cliff or careened off of it altogether.
Ezra Klein
Ezra Klein is the editor of Wonkblog and a columnist at the Washington Post, as well as a contributor to MSNBC and Bloomberg. His work focuses on domestic and economic policymaking, as well as the political system that’s constantly screwing it up. He really likes graphs, and is on Twitter, Google+ and Facebook. E-mail him here.
Ask yourself the following questions and see how the crisis might impact your life.
On Sunday night, Mario Monti, the new prime minister of Italy, received his cabinet’s approval for a tough package of reforms. On Monday, Angela Merkel and Nicolas Sarkozy, the leaders of Germany and France, respectively, announced an agreement on reforms that would lead to a tighter fiscal union — a plan that, if it’s well received by other nations in the euro zone, could persuade Germany and the European Central Bank to mount a rescue of the euro zone. Later in the day, Standard & Poor’s informed Austria, Finland, France, Germany, Luxembourg and the Netherlands that they were considering downgrading their credit.
I’m watching this unfold from Germany. The topic of my trip was supposed to be the reforms Germany made to its manufacturing sector over the past decade. Because of the timing, the future of the euro has dominated. In more than a dozen discussions with policymakers, I’ve noticed that Germans just do not talk about this crisis the way anyone else does. Some of the differences:
• They seem serenely confident that it will all work out, and this will end with a stronger, more united Europe. There’s less panic than you would expect. Less panic, certainly, than there is among American economists and policymakers.
• History matters here. A lot. In America, we tend to think of the euro zone as an economic entity. In Germany, it’s also spoken of as an ideological entity — a political project intended as an answer to centuries of wars and decades of uneasy peace. Giving up on it thus risks much more than mere economic chaos. It risks everything that Europe in general, and the Germans in particular, have been working toward since the end of World War II.
• In part because history matters, France matters. The Germans are very sensitive to accusations that they’re attempting to dominate Europe through economic means. To calm that fear, they have been very careful to stay in lockstep with France. That’s likely to continue.
• While Germans worry about the appearance of German power, they also worry about the diminution of European power. Many see the euro zone as a political project that assures Europe a significant voice in international affairs going forward. If it dissolves, they worry that they’ll be drowned out in a conversation that increasingly takes place between the United States and China, with India and Brazil vying with Europe to be heard.
• But the Germans don’t want to be saps, either. The question here isn’t so much whether the troubled countries on the European periphery can pass plans to reduce their deficits and deregulate their labor markets. It’s whether they can stick to them. That’s why the Germans are intent on solving this through a new treaty that empowers some entity — perhaps the European Commission — to veto budgets that break the treaty’s rules and penalize countries that run large deficits. Imagine you were a resident of Ireland: Would you want to hand control of your budgets to bureaucrats in Brussels? Can you imagine anything like that passing in America?
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