When George Osborne attended his first meeting of European finance ministers on Tuesday, he may well have felt a pang of pity for his Continental colleagues. True, Britain has the worst deficit and the most rampant inflation in Western Europe. True, Mr Osborne may have been outmanoeuvred over the regulation of hedge funds. But the Chancellor has a trump card: the pound sterling. When it tumbles, we can export our way back to growth. When Greece implodes, we can maintain a studied distance. All things considered, it could be worse. We could be Germany.
Germany’s dire situation today offers the most eloquent of all arguments against the concept of a single currency. A nation of skilled workers, industrious entrepreneurs and frugal savers finds itself shackled to an irresponsible mob of southern Europeans, whose interests have to be put ahead of those of German taxpayers in order to avert the collapse of a currency structure that was never set on firm foundations.
In the €710 billion ‘rescue’ unveiled two weeks ago to halt the Greek contagion from infecting the sovereign debt of Portugal and Spain, Germany will have to contribute as much as €150 billion on top of its €22 billion contribution to the earlier bailout for Greece. The response of German voters was imme-diate: they inflicted humiliating defeat on Angela Merkel’s Christian Democrats in regional elections for North Rhine-Westphalia. This is the start of a backlash gathering strength and ferocity across the country.
To pick up the German press is to realise the depth of the crisis that the euro is in. Bild Zeitung, Europe’s biggest-selling daily, praised Merkel as the Iron Chancellor when she initially refused to bail out the Greeks. It has now turned on her with a vengeance for her u-turn — accusing her of caving in to Nicolas Sarkozy.
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