I hate to say it, but I'm fast coming down on the Blame Deutchland side of the Euro Blame Game. I know, I know—Greece and their profligate ways and lazy work habits! They're the ones who started this whole mess!
Except that's not quite the truth. As for lazy, Greeks are no more lazy than the rest of the world, with the exception of South Korea. According to Forbes in 2008, Greece was ranked the second hardest working country in the OECD. And profligate? Sure, the country's government spent more than it took in, but its government budget as a share of GDP was 48.05 percent, only slightly more than Germany's 45.79 percent. This is quite a telling figure: The real problem in Greece wasn't government spending, it was lack of government revenue. Greeks may not be lazy, but they surely don't like paying taxes.
But even more than these basic facts, there's the German's gung-ho attitude for the common currency. As Ezra Klein, Washington Post business writer, explains, the Germans have an almost maniacal obsession with a unified Europe, perhaps due to their history (while at the same time being reluctant to embrace German power). He also compared Germany's insistence that the periphery countries amend their fiscal policies before any European Central Bank intervention can occur to a doctor insisting that his patient lose weight before he'll treat her for a heart attack.
That's apt, considering the attention being paid this week to France and Germany's reworking of the entire eurozone treaty. Is fiddling with rules at this late date, rules that can't be enacted for years, really the most important focus right now? Especially when the original rules were ignored (in favor of the 'higher goal' of European unity) not only for Greece but also for Germany when they failed to keep within fiscal restraints.
Kevin Drum offers a closer look at how the entire Euromess came about, and it turns out it was the core economies (Germany, France, etc.) who encouraged the instability of the periphery.
The primal sin here is that for years supposedly sophisticated investors in the core shoveled money into the periphery with abandon, ignoring the obvious risks of doing so.
Why would they do this? Because not only were investors making money from the high interest rates the overheated periphery economies were offering, but the industrial output of countries like Germany increased when the Greeks and Italians and Portugese bought Volkswagons and vacuum cleaners made in Mannheim.
You can't really blame them for that, though—everybody wants to sell vacuum cleaners, right?
Or you could cast about even further for blame: you could argue that the United States, with its property bubble and lax banking rules that allowed junk deriaviatives to be sold and shorted, is really to blame, since it was the 2008 financial crisis that originated with Lehman's collapse that exposed the weakness of the euro zone.
You could even blame the original founders of the euro zone, those idealistic Europeans hoping to unite their sister countries in an effort to compete more effectively with the United States and China. They ignored the inconvenient fact that countries that can't devalue their currency are at a disadvantage when they have account imbalances.
But in the end, there's really no point assigning blame: the euro crisis will be resolved when Germany loosens its hold on the ECB and the eurozone is tidied up, bailed out, and wrapped with a large EU blue ribbon.
I just wish they'd do it before we actually reach the brink of worldwide economic collapse.
