Germany Cuts Off Its Nose
By JOE NOCERA
Published: November 28, 2011
"... Today, it is Germany that is making policy moves that seem insane. Locked into their modern-day orthodoxies, German politicians look at Greece with something akin to contempt. Aid to Greece — aid that is given grudgingly, when it is given at all — must be accompanied by severe austerity measures, the Germans believe, because the Greeks need to learn how to live within their means, the way Germans do.
For months, Germany has strongly supported the European Central Bank’s unwillingness to do the one thing that might have stemmed the euro crisis: buy and guarantee large amounts of distressed sovereign debt. When I asked Martin Wolf, The Financial Times columnist whose crisis coverage has been indispensible, why the E.C.B. was reluctant to act, he theorized that it “accepts the German view that monetizing government debt is inherently immoral.” As a result, though, what should have been a small crisis centering on Greek debt has turned into a full-fledged European contagion...."
Comment: I wonder what is more insane: German stubbornness or the uncontrolled monetization of debt which surely would bring hyperinflation.