by Eva Harder
Maybe it’s crude, but this picture sheds some light on the German economy. Engraved onto one of Düsseldorf’s city street walls, the old German maxim that reads, “Dies Marchen Wird Wohl Niemals Wahr. Das Leben Lehrt Sei Klug Und Spar,” does not rhyme in English, but the message remains the same: “This fairytale will probably never come true. Life teaches you to be smart and save.”
As the largest economy in the Eurozone, Germany is under pressure to lead the way out of the current economic crisis. German Chancellor Angela Merkel enacted strict measures of austerity in response, a tactic that garnered public criticism in recent months. But Merkel once again made international headlines on Sept. 12.
The European Stability Mechanism (ESM) is an organization designed to work with the European Central Bank (ECB) to provide financial assistance to struggling members of the Eurozone. Germany is the only country out of the 17-strong Eurozone not to ratify the ESM. Germany’s Constitutional Court, the German equivalent of the U.S. Supreme Court, changed that.
Germany has a long-standing history of favoring its own interests above those of Europe. Some politicians and citizens believe the country’s democracy is threatened by granting greater financial control to the ECB, and they responded by petitioning the court to prevent the ratification of the ESM. The court’s ruling, however, found the measure to be constitutional (with certain limitations), paving the way for 500 billion-euro ($645 billion) to go toward other Eurozone countries in need.
Although most news sources said the ruling is a victory for Merkel politically, a majority of Germans still oppose the ESM. As reported by the British newspaper, The Guardian, “A poll before the ruling showed that 54 percent of Germans wanted the court to block the ESM, amid growing fears that Germany is ceding too many powers to European institutions. The court was petitioned by 37,000 Germans arguing that the ESM was anti-constitutional.”
The media’s rhetoric surrounding the ruling is reminiscent of the U.S. Supreme Court’s decision this past July, which allowed the Affordable Health Care Act to go into effect under the provision of taxation. In terms of political rhetoric, Germany and the United States are acting as sort of book ends for 2012, beginning and ending the year with major elections. The media have focused on similar issues in coverage of both nations, and they all agree on a simple fact: German or American, we’re worrying about the economy.
The average German citizen is fully aware that the political and economic decisions of the United States will affect him or her, and European televisions and newspapers are tuning in to American voters to see how they respond. Most American citizens, however, are unaware of the monumental economic decision made in Germany on Sept. 12, despite Germany’s definitive role in the European economy. But the link between the U.S. economy and Europe’s is easily visible, from trade and foreign investment to the stock market. With a U.S. presidential election looming in November, all eyes are on America. More of those gazes need to be shifted toward the global economy. Maybe that notion is just a fairy tale, but there’s nothing wrong with hoping it comes true.