Thursday, September 29, 2011

Germany, do your duty and save the euro today

by Mario Monti

Financial Times

September 29, 2011

By a vote of the Bundestag on Thursday, Germany just may decide to kill its own best product – and precisely when it is really beginning to work. Such would be the result of a rejection of the eurozone package supported by Angela Merkel, the chancellor, and endorsed by many in the opposition.

When the euro was launched, it was given two almost impossible tasks. First, it had to provide a number of countries with a single currency that would prove as stable as had been the Deutschmark. Germany, which had inflicted immense tragedies to itself and the world partly as a consequence of hyperinflation between the two wars, could not settle for anything less. Most other European Union countries were keen on having themselves an “anchor of stability” on which to base economic growth.

The second, even more difficult, task was to induce a profound transformation not just of economic policies and structures but also of the institutions and the culture determining them. The agents of change were to be the principles and the rules underpinning the euro, enshrined in the Maastricht treaty, the stability and growth pact and in the Lisbon treaty, where the blueprint of a “highly competitive social market economy”, first experimented with in Germany in the 1950s, was adopted by the whole EU. National specificities, a richness of Europe, would of course persist, but as a consequence of sharing the euro all eurozone countries would gradually become somewhat more similar to the template developed in Germany as ordnungspolitik, the orderly structured application of liberal principles.


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