In an article in today’s Guardian, Josef Joffe argues that Mrs Merkel’s critics “should stop accusing her of Teutonic arrogance” because of her implied reluctance “to take on everyone’s debts.” We might accept that reluctance. However, while German policy makers are no doubt aware that we are dealing with a financial derivative-bank deregulation crisis made in Washington and London, and with reference to Chicago, rather than a European financial crisis as such, the reality is that the German banks also want “their” money.
Of course, having said that, another reality is that unlike Wall Street and the City, Frankfurt, does not dictate German policy and that is why, the government in Berlin can at least feel confident when it comes to introducing a financial transaction tax, while Washington and London will inevitably continue along the road to perdition. The question, of course, is, will the disaster capitalists suck in the rest of the planet. How the so-called “European financial crisis” develops over the next couple of weeks will, at least, partly answer that question.