This commentary is from the archive, as your commentator is on holidays. It was first published in March of this year.
Remember when things got so bad on the Euro periphery that countries like Spain, Portugal, Italy, Ireland and, well, Greece, had to pay exorbitant rates in order to borrow on the international bond market? It turns out that the same Euro crisis was worth €41 billion Euros to Germany. This was because of the flight to safety of investors, who were prepared to effectively pay that country for minding their money for the duration of the crisis, according to an answer given in the German parliament and reported in Der Spiegal: http://www.spiegel.de/international/europe/germany-profiting-from-euro-crisis-through-low-interest-rates-a-917296.html
This report illustrates very well the symbiotic relationship that exists between Germany and the EuroZone peripheral states. The economy that is overseen by Angela Merkel is a strong one. Even without a Euro Zone, Germany would find itself in the position of being bankers to the rest of geographical Europe. Without the EZ, however, Berlin would find itself in the same position as Switzerland – it would have a currency exchange rate for the Deutschmark that would make its exports prohibitive for the rest of the world. A Euro which is diluted as a result of the relatively profligate activities of certain other members is a positive for the Germans.
Does austerity have rewards?
Now, if only Frau Merkel and her finance minister could convince others that the Teutonic way doing things of a fiscal nature – living within your means so that you can pay your bills, no matter what, and thereby find yourself in a position to profit from the good times – is the way to go, they would get a better press from the opponents of so-called austerity, many of whom have taken to dressing their opposition up in self-serving pseudo economist-type pronouncements.
But no-one can accuse the Germans of not setting the example. They found themselves in definite austerity mode after the reunification of east and west. They stuck with it and the economy we can all see at present, even after a devastating global financial crisis, is the result. Must have something going for it.