Germany: Europe's reluctant ATM
Resistance grows across Germany to bailing out other debt-ridden countries. Will Germany drop the euro?
Frankfurt — Margareta Mela, a supermarket cashier, doesn't want Germany to become an ATM machine for Europe. When the Berlin Wall fell 20 years ago, Germany passed a "solidarity tax" to aid its poorer brethren. So far, it has given 100 million euros to the cause.
Now along comes the bailout of Greece, which Germany has been the biggest contributor to. "Why is it that we Germans always have to pay more?" asks Ms. Mela. "Greece is bankrupt, and we have nothing to do with it."
Mela's vexation is shared by many people across Germany as Europe copes with its worst financial crisis since World War II. Polls show a majority of Germans don't want to write checks for other countries that they feel are profligate – particularly Greece.
Underscoring the point, voters in Germany's most populous state recently delivered a serious setback to the coalition government of Angela Merkel, overturning her party's control of the upper house of parliament. Ms. Merkel initially opposed the Greek bailout. Then, when the debt crisis showed signs of spreading, she agreed to contribute $11 billion to the rescue fund.
German reluctance to be a bank vault for other members of the European Union (EU) is rooted both in the past and in its changing identity today. Germans are ever mindful of the hyperinflation of the 1920s that was partly responsible for the rise of Nazism. Indeed, after World War II, keeping monetary stability became a national priority. "Germans are extremely concerned about fiscal stability in a way no other country is," says Oliver Marc Hartwich, a research fellow at the Centre for Independent Studies in Sydney, Australia.
Later, when it came time to join the EU, Germany was an enthusiastic participant. It paid the biggest share of European integration. Embracing a broader European identity "helped the Germans leave their catastrophic and embarrassing past behind," says Mr. Hartwich.
Yet the Greek crisis and a foundering euro has renewed fears of inflation. It coincides with a new, more assertive, Germany – one more skeptical of the EU. "German guilt has been turned into too much money over too many years," says Markus Kerber, a professor of finance at Berlin Technical University. "But this is over. All of a sudden Germans are grasping the figures."
While many people here believe Germany had no choice but to help Greece to avoid a broader European collapse, others now think Berlin might withdraw from the eurozone. One option would be for it to link up with other, more prosperous, neighbors. "The Dutch and the Austrians are fundamentally in the same situation," says Kerber. "They don't want to see the monetary union turn into a transfer union."