Germany can do more for Greece

German Finance Minister Wolfgang Schaeuble met with U.S. Treasury Secretary Timothy Geithner.
German Finance Minister Wolfgang Schaeuble met with U.S. Treasury Secretary Timothy Geithner.
Posted: August 03, 2012

If you have a sick friend whose illness could affect your own health, you might go so far as to suggest the medicine he should take.

Such was the case with Treasury Secretary Timothy Geithner, who recently paid a visit to European leaders and, in particular, his German counterpart, Finance Minister Wolfgang Schaeuble.

The Obama administration is afraid that a deepening euro crisis will damage the global economy even more than it has, which, of course, would impact American jobs.

The euro crisis is a debt crisis. Greece, Ireland, and Portugal are no longer able to service their debts without assistance. Italy and Spain are having problems, too.

In order to prevent turbulence caused by the financial markets' losing trust in their common currency, other euro countries came to the conclusion that they had little choice but to jump in and help, even though the European treaties call for each country to deal with its own financial problems.

Germany, which is the largest and strongest national economy in the euro zone, has been hesitant to give any more money than it was forced to.

Chancellor Angela Merkel is afraid that doing otherwise might hurt her chances to get reelected next year. She knows Germans are not too keen on giving away their tax money to countries that have done a poor job with their economies.

Nevertheless, Geithner is right to push Merkel and other European leaders to do more to solve the crisis, including the investment of a vast amount of money.

It was right to compel the Greek government to cut back on spending, but now that country needs not only a good plan but substantial foreign aid to reboot its economy. Compare its need to post-World War II Germany's, when the United States helped it with the Marshall Plan.

You can't cure a patient with half a dose of antibiotics.

U.S. officials aren't alone in criticizing the German government for not doing enough to help the struggling European countries.

Former German foreign minister Joschka Fischer has been outspoken since the beginning of the crisis. "Merkel has had her rendezvous with history, and she blew it," he said.

To be fair, Merkel has not blown it yet. But she must make critical adjustments for the euro to continue to be a success for Europe.

For Germany to provide more financial aid would only be a start. In order to prevent a similar crisis from occurring in the future, Europe also needs to share more government functions than it does now.

It doesn't work well to have a common currency but not much of a common fiscal, economic, and social policy.

It may be a tough sale to ask the Europeans to shift more power to centralized institutions, but it would not be impossible to get their approval.

Older people appreciate the long period of peace that has resulted from the European Union, an achievement you can't measure in euro coins or dollar bills.

And many young people have been brought up to think of themselves as not only German, French, or Spanish citizens, but Europeans.

It would take strong leadership, but a United States of Europe isn't out of the question.

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