German Chancellor Angela Merkel has taken it upon herself to champion EU bailouts, an effort that is unpopular in Germany, unpopular in Greece, and -- she believes -- crucial for the survival of the continental union
Perhaps the best way to understand the eurozone crisis, especially from a far-away place like the U.S., is to cut through the layers of economic explanations, coalition government definitions, and European Union policy snarls to the single person who may be most central to the EU drama. Insofar as a face has been put to the issue, the face is German chancellor Angela Merkel's, and it's not a face that gives much away. Somewhere in the back of your head you can hear a high school drama teacher screeching about how that emotion simply will not "read."
"The skepticism among businessmen," a journalist on the voiceover then admits, "is large."
No kidding. When the German lower house, the Bundestag, voted, in effect, to expand the European Financial Stability Facility that bails out euro-family black sheep like Greece, the Economist noted that the "doubters" within Merkel's own coalition, especially in the Free Democratic Party, almost chose to "[deny] Mrs. Merkel her so called 'chancellor's majority.'" In other words, they would have voted against what is perhaps the single issue she champions most. That would have been, for Merkel at least, disastrous. "Her government is already demoralized" from political rebellion; Merkel "needed to show that she could rally her allies in support of her most important policy."
Think of it as a bit like the health care reform legislation pushed by U.S. President Barack Obama. What Merkel has chosen to do, not all that unlike Obama, is loosely bind her fate to that of a single big position. For about a year, if you were American, and you watched the news, you'd get an eyeful of health care reform. Right now -- and it's been this way for a while -- if you are German, and you watch the news, a reliable third to two-thirds of it seems to be about bailouts and trying to save the euro.
Because Germany is the keystone in the European arch at present -- how it responds to the growing eurozone financial crisis will determine much of the continental union's fate -- Merkel's costly and difficult political battle is as much about the welfare of Europeans in general (and Greeks in particular) as it is about Germans. The whole thing can actually look a bit noble.
Without Merkel fighting hard for the EU and the euro, the cause would get a lot more hopeless. Recall, too, that this crisis was hardly of Merkel's making -- it was thrust upon her (and upon Germany) by political and financial failures in countries like Greece, Spain, Ireland, and Italy. Obma's health care reform battle, by contrast, even if the situation gravely required attention, was more of a hand-picked issue.
That's not to say there isn't plenty of room for disagreement. If you were a German right now, you'd probably be pretty much through with Greece; from the outside, it's hard to see the Greek position as a result of anything but combined moronic mismanagement and popular fantasy. Athenian protesters, rioting in the street rather than accept cuts to social welfare programs their state can no longer afford, aren't helping themselves with the German public, either.
The Greek-German tension is getting bad. Take, for example, the video below, which shows Athenian protestors clapping as a woman in a Merkel mask dances with a man dressed as Adolf Hitler.
This came in response to Germany's demand that Greece implement austerity measures -- not all that unreasonable, given how much Germans are paying to save the Greek government at present. It's also not unreasonable given that this would be in line with the conditions Greece accepted to join the eurozone, conditions which Greece, from the German perspective, pretty much ignored. It's hard to blame those in Germany who'd like to see a little tough love for Greece by refusing them a bailout.
Then, of course, there are the dire warnings from economists about what will happen if Greece is allowed to belly-flop in its own mess. The economic ripples it would send through the eurozone would harm everyone, including the Germans, whose national economy is tied to the greater continental fate. Hence Merkel's conviction.
Will Merkel prevail? Hard to say: a recent regional election showed the parties of her coalition looking weak, but the recent Bundestag vote in her favor suggested unity. Even if you're taking the temperature of the German media, it's hard to tell where exactly the critical mass lies. "No one knows," an opinion piece by H. Evert and U. Machold admits freely in Die Welt, "how the euro-crisis will play out." Another op-ed, this one from Robert Birnbaum in Die Zeit, argues that true euro-skeptics are pretty rare in Germany. "Can it really be that people are pretty well worked up we're supposed to help the tricking Greeks with our good money?" he asks rhetorically. Certainly people are irritated, but he's not sure that can be called "euro-skepticism."
In the last week of September, Standard & Poor's also warned that further expanding the European Financial Stability Facility (the body that provides bailouts), as the Bundestag then voted to do, would result in a ratings downgrade for Germany. That's a whole other layer of complication to cut through if you really want to understand the European situation. Here's the translation, though, for the purposes of the simple narrative: Merkel's in a very tough spot.