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The German Leadership Question

FRANKFURT – Many in the eurozone’s crisis countries complain that the source of their suffering is a rigid economic-austerity regime – including reductions in wages and pensions, tax increases, and soaring unemployment – imposed on them by Germany. Hostility against Germany has reached a level unseen in Europe since the end of World War II.

And yet, despite this antagonism, loud calls for Germany to assume “leadership” in Europe can also be heard. Germany is undoubtedly Europe’s most important economy; and, with low unemployment and relatively sound public finances, it is also the best-performing one – at least for the time being. So Germany is asked to take the lead in saving the eurozone, an outcome that is in the interest not only of the entire European community, but also of Germany, which is widely seen as having gained the greatest advantage from the single currency.

Complaints about the imposition of a “teutonic regime” and appeals for German leadership seem to contradict each other – a kind of continent-wide cognitive dissonance. In fact, the complaints and calls for leadership are mutually reinforcing. The implementation of austerity policies in the periphery has caused these countries to ask for help and request that Germany take the lead by putting more money on the European table.

Nobody would deny that Germany has an interest in preserving the euro. So why shouldn’t it support its partners with financial help to overcome the crisis?