November 9, 2011
World leaders are performing the "haka" – hitting the pockets of their jackets and trousers to illustrate mock surprise that they've forgotten their wallets. The US won't use the IMF until the Germans have used the ECB which they won't until Portugal, Italy, Greece and Spain enact structural reforms. Pass the responsibility parcel. But if you want to understand what's going on in Europe at the moment, do mention the war: the second world war.
President Obama told Germany's Chancellor Merkel to pay up for the wider ills of the eurozone, reminding her that the US transferred huge amounts of money to Europe after the war through the Marshall Plan. Greece was bitterly angry with the rigidity of the German position over the last fortnight. Greek newspapers pointed out that Germany had not yet finished paying off reparations to Greece.
Germany herself is so reluctant to turn on the taps of the European Central Bank because it is popularly regarded to be the kind of inflationary activity that led to the rise of the Weimar republic and Hitler. Angela Merkel, an east German, is said by veteran west German politicians to be sanguine about the break up of the eurozone. The postwar world economy is on the couch.
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