The Buzz

"On Greece, it is clear that Merkel has failed the test of statesmanship."

In Greece, with one in four unemployed, the people have voted (once again) for an end to self-defeating austerity imposed from abroad. In Brussels and in Berlin, officials and ministers declare their loyalty to a 'European' vision of monetary and fiscal rectitude that might have borrowed its name from Foucault ('discipline and punish') or Dostoyevsky ('crime and punishment'). Across the whole southern half of the continent—from the Pillars of Hercules to the outer approaches to the Hellespont—unemployment has robbed a generation of a future.

Only a decade ago, Europe was mostly remarkable as a place where history had stopped. Nothing symbolized this more than the euro. Today, the single currency is the emblem of a crisis not just in Europe's stagnant economy but in the whole idea of European political unification.

How did we get here?

Greece's sins—and there are many—have been endlessly detailed. Cooked books. Corruption. Waste. In Denmark, where I live, the story stops here: profligate Greeks.

But Greece has not imposed a depression on itself. If Athens' economic position in 2010 was parlous, by 2012 it was catastrophic. What brought this about was not Greece's failure to stick to the medicine meted out to it, but the medicine itself. We now know that even the IMF questioned the remedies ceaselessly recommended.

But Germany, above all, insisted. In the middle of a global recession unprecedented in severity since the 1930s, there would be drastic cuts to pensions and welfare spending; an admittedly bloated public sector would lose thousands of jobs; the rights and conditions of those still in work would be dramatically eroded; national assets would be sold off at fire-sale prices. What's more, Berlin would do nothing to stimulate demand at home or elsewhere in the Eurozone to compensate for its collapse in the Aegean. On the contrary, Germany, with a trade surplus greater than China's, would make a budget surplus a requirement under federal law.

What explains Germany's behavior? The first part of the answer can be found in the personality of its chancellor.

At the end of last year, Angela Merkel was the Western world's favorite politician. Responding to the global interest, a long and revealing biographical essay in the New Yorker notes “scientific detachment” (Merkel is by training a quantum physicist), “caution under dictatorship” (she grew up in East Germany) and “reticence” as her defining personal qualities. A senior German official described her as “about the best analyst of any given situation that I could imagine...She looks at various vectors, extrapolates, and says, "This is where I think it's going."”

But in regard to Greece, that only raises the question: did she? Is this really where she thought it would end? Is this, in fact, what she wanted?

Certainly, Greece needed reform. But Merkel is on record as saying that she never considered Greece fit to join the euro. The punishment for Athens' profligate dishonesty should be so tough that, in her words, “nobody else will want this.”

Usually praised for her foresight, Merkel has led Greece and Europe to the brink by failing to see what should have been obvious from her much-vaunted reading of German history: that cutting public spending in the middle of a global recession to satisfy the demands of foreign creditors would create the depression-like conditions that have ever been a boon for political extremists; and that, if such measures were forced upon Greece by a foreign government, the principles of democratic politics on which the EU is built would be flagrantly undermined.

But what matters to Merkel is not Europe but Germany. She can (and does) take Europe for granted. As Merkel's predecessor Helmut Kohl is quoted as saying in the New Yorker, she is interested in power, and Germany is its base.

The New Yorker notes that, as a former East German, Merkel has a real commitment to the overriding importance of personal freedom and national self-determination (note her many statements, for example, on Ukraine). But she is nonetheless ‘a learned democrat' and a learned Atlanticist. And growing up a world away from the 1950s and 1960s 'fathers of Europe' (de Gasperi, Monnet, Schuman and Spaak), she's no less a learned European. Far less than her predecessors Kohl or Gerhard Schröder, thinking like a European doesn't come at all naturally to her. And the crisis has shown it.

In Germany, her policies are wildly popular.

The country's most popular politician for over a decade (if she has recently lost that position to her Finance Minister Wolfgang Schäuble, it's because he's seen as even more a monetary and fiscal disciplinarian than she is), Merkel is known to her people as Mutti ('Mum'). She's perfectly in tune with Germans' perception  of debt as a sign of moral failing, the legacy of a Lutheran mentality compounded by the still traumatic memory of 1930s Weimar hyperinflation and the red carpet it laid for the Nazis.