Why do Germans seem to be so relaxed about the euro crisis? That's the question I've been asking myself over the two years in general and the last two weeks in particular. A lot of smart people are now increasingly pessimistic about the future of the euro - despite the new emphasis by European leaders on growth. For example, in an interview with the Spiegel last week, Paul Krugman described the measures that Francois Hollande and Angela Merkel seem to have agreed as "a water pistol against a charging rhinoceros". When a Nobel-Prize-winning economist tells me that the economic equivalent of a rhinoceros is charging at me and all I have is a water pistol to defend myself with, it scares me. So why do Germans seem to be so fearless?
Over the last two years I’ve been struck again and again by the apparent disconnect between the discourse in Germany and the discourse elsewhere in Europe and the world. It's partly that there is a different narrative about the crisis in Germany, which focuses on Greece and fiscal responsibility rather than economic imbalances and the flawed architecture of the eurozone (what Krugman calls the "Hellenization" of discourse). But it’s also that apart from a few exceptions such as Joschka Fischer, Germans just don't seem to think the situation as serious as everyone else does. Every time I talk to German politicians or officials about the crisis I am struck by the apparent lack of a sense of urgency in the way they talk about it – even compared to their counterparts in the UK, which is not even in the eurozone but is worried about the catastrophic effect that a break-up of the single currency would have on its own economy. "Are they on another planet?" I've often found myself wondering.
For example, the week before last, I went to listen to a senior German politician speak in London. Earlier that day, David Cameron had said the eurozone "either has to make up or it is looking at a potential breakup" and Mervyn King, the governor of the Bank of England, had warned darkly of the "storm heading our way from the continent". But the German politician talked calmly about supply-side reforms that will produce results in the next decade. A few days later, as Krugman was blogging about "apocalypse fairly soon", it was the same story with a German Christian Democrat MEP. Both of them seemed to be focused on solving long-term problems when there is a huge short-term problem – the rhinoceros – right in front of them.
It is frequently said that the reason Germans don't think the crisis is that serious is that they don't feel it personally because the German economy is doing relatively well. (I emphasise the word "relative" because Germans don't feel as if they've never had it so good. In fact, part of the reason Germany is so unwilling to make concessions is that the economic miracle doesn't feel like one to them because of the wage restraint over the last decade that is largely responsible for it.) That may be true for ordinary Germans. But policymakers read English-language newspapers and receive briefings. It is not lost on them that much of the rest of the world, including their traditional allies, sees things differently.