"It's all Germany's Fault."
Wrong again. It's easy to blame German stubbornness in preaching austerity, reform, discipline, and penance for the continued metastasis of the crisis. Many fault Germany for helping to create the crisis in the first place, as the ECB was modeled on the Bundesbank and the euro, in effect on the Deutsche mark. German policymakers accepted the single currency zone's incomplete construction and many willingly turned a blind eye to its first decade of tinkered budget numbers in the periphery, which helped them capitalize on a captive export market that benefited German firms enormously. Rhetoric from German politicians about the distressed peripherals too often has been ugly, with some calling for the sale of Greek islands and the Acropolis to help them pay their international debts; even German Finance Minister Wolfgang Schaeuble pointedly reminded the Greeks that "membership in the EU is not compulsory." Perhaps most daunting has been Chancellor Angela Merkel's seeming inability to grasp the direness of the Europe's predicament -- she acknowledges that the eurozone is "in a race with the markets," and then limits how fast Germany will run -- frustrating friends and foes alike.
The truth is, though, that Germany has made an enormous commitment to the European project, and one that has not wavered. From the creation of the European Coal and Steel Community (the EU's forerunner) less than a decade after World War II to the present day, Germany has staunchly supported and even driven a series of steps that have had the net effect of subordinating German power to broader pan-European ends. The EU's godfather Robert Schuman was French, but no country has embraced the spirit of his eponymous declaration more than Germany, and that hasn't changed.
What's more, Germany has over the past year undergone an unbelievably rapid shift in its role in Europe. Casting aside reluctance rooted in its fraught 20th-century history to assert control in Europe, Berlin has assumed the mantle of leadership at a time when it is the only European entity seemingly willing or capable of doing so. To its credit, Germany has shown unforeseen flexibility on a wide array of ideas and initiatives that only a short time ago were completely verboten: multiple relaxation and renegotiation of the conditions required for Greece to receive its rescue funds, direct recapitalization of the Spanish banking system, the creation of European bailout mechanisms like the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM), consideration of common eurobonds, banking union, fiscal union, and tacit approval of the ECB's unorthodox market interventions.
Germany receives blame largely because many, in the United States in particular, look to Berlin to play a role akin to the one Washington played in financial crises past: formulating a comprehensive crisis-response plan and committing a substantial amount of money to implement it. Germany can't and won't do this, and its inclination to move incrementally, and only after distressed countries agree to significant reform measures, remains dangerous as the crisis moves exponentially. Overall, however, Germany and Merkel have been far more pragmatic and effective as crisis managers than has been generally acknowledged.
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