The spectre of history looms over the eurozone crisis and Germany’s role in it, but it has less to do with Nazism than with the traumas and economic woes of the 1920s.
As the eurozone staggers from one crisis to the next, a growing consensus of opinion blames the Germans for the impasse. Europe’s most powerful economy, Germany stubbornly refuses to sanction what seems to many the obvious way out, which would involve the European Central Bank (ECB) printing money to lend to countries such as Italy that have accumulated more sovereign debt than they can cope with. The new cash flow would enable bondholders of government debt to be paid. Quantitative easing would stimulate demand as people and businesses spend the extra currency, kick-starting national economies and helping them to get over the crisis. Yet Angela Merkel’s conservative-led coalition in Berlin refuses to sanction this obvious step and the crisis continues.