Currency Crisis Heightens Trans-Atlantic Tensions

Spiegel
October 21, 2011

The US is becoming increasingly impatient with Europe's seeming inability to solve the ongoing euro crisis. Many in the United States think they know who is to blame: Germany.

For once, US President Barack Obama sounded satisfied. "Chancellor Merkel and President Sarkozy fully understand the urgency of the issues in the euro zone and are working diligently to develop a comprehensive solution that addresses the challenge," reads a White House press office statement on a Thursday video conference involving the three leaders, in addition to British Prime Minister David Cameron.

The message could, of course, be seen as one of many such White House statements issued each year expressing confidence in allies as they face difficult problems. But Thursday's statement stands in sharp contrast to the trans-Atlantic bickering that has accompanied Europe's search this autumn for a solution to its growing common currency crisis. And it obscures the truth: Many in the US think Europe -- and Germany in particular -- has taken a wrong turn.

"It's hard to detect which matters more: German behavior over Libya or its course in the management of the euro crisis," writes Ulrike Guérot of the European Council on Foreign Relations in a recent essay. "But, in short, most US analysts believe that Germany got both wrong."

As if to highlight the impression of European bumbling, the EU on Thursday announced that a second summit was to be held next Wednesday in addition to the one scheduled for Sunday. Paris and Berlin have simply been unable to agree on how best to maximize the impact of the euro backstop fund, the European Financial Stability Facility (EFSF), and need a few more days for talks.

The debate over the EFSF has been going on for months, as has a concurrent and equally rancorous discussion over how best to approach Greece's ongoing reliance on outside financial assistance. The solution, as leaders across the European Union have said in recent months, is more Europe. Greater integration, they say, is the only way to provide the kind of political framework necessary to ensure the stability of a currency like the euro.

That will take time, though. What is needed now, however, is a quick fix -- one that will reassure the markets that Europe has the problem under control.

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