The European Council on Foreign Relations

Ach Germany! The German media and the euro crisis

Date: 30th November 2011 | Author: Ulrich Speck,

Categories: Euro Crisis, Germany in Europe,
Tags: , ecb, euro crisis, greece, merkel, merkel , der spiegel

The New York Times – correctly – talks about German denial. The euro crisis is certainly present in the German media – especially in Der Spiegel and in newspapers focused on economics, like the Financial Times Deutschland and Handelsblatt – but while the crisis makes headlines in other countries, the broad majority of German media has being playing it down. There is reporting, a sprinkling of analyses and commentary, but no specials and not much of an attempt to put the crisis in political or historical perspective. The reporting is often tucked quietly away in economics sections. There is very little soul searching about Germany’s role in Europe. The cultural (“Feuilleton”) pages - which have often been at the forefront of past debates - are content with a little bit of capitalism-bashing. The German public sphere handles the crisis as if Germany were an island.

In fact Germans often handle the crisis as if they were spectators, not actors. The crisis for a long time was about them - especially 'lazy' Greeks - and not about us. The greater the pressure from outside, the stronger the rejection. German commentators discuss what they see as unfair bashing of Germany, and articles are written about what is seen as unfair treatment by (yes) British tabloids. What unites Germans is the sense that they are right. German success is well deserved, because of German virtues - so why should we pay others people's debts?

The euro crisis now, in its endgame, seems to boil down to one question: how much do Germans want to pay for the Euro? The answer is, at least if you look at the general mood: not very much. Already enough, or already too much.

This attitude is pointing Mrs Merkel towards a disaster. She cannot do what the world expects from her, which is to put Germany’s full weight behind the euro, thereby convincing the markets that the Eurozone is backed up by German economic might. On the other hand Merkel knows that we’re heading towards disaster. What she did in the past was give long-term promises to fight the short-term crisis: rebuilding the Eurozone architecture was meant to calm the markets, winning back the political initiative. But this tactic has failed so far - worse, it has probably exacerbated the crisis, because Merkel at the same time refused to tackle the short-term problems. It has become harder and harder to win back trust and confidence. 

Many observers think that Merkel is ready for dramatic measures, and that she is just waiting for the crisis to become more acute, so that she can justify using German resources to their full extent to save the euro. But her calculation might not work, because the German media largely refuses to see the crisis as a fundamental threat to German prosperity and maybe even security. At the moment, it seems that international pressure is only strengthening a kind of passive-aggressive refusal of large parts of the German political and media elites to accept that Germany has no choice but to back up the euro with its full weight. This refusal has become one of the main reasons for the aggravation of the euro crisis in the last few weeks and months.

Ulrich Speck is an independent foreign policy analyst and commentator. He edits the website Global Europe (www.globeurope.com)

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12 comments

Eric Bonse 30th November 2011 at 06:11pm

Sorry, but this is bullshit. The Euro crisis is THE issue nr. 1 in German media. And the assumption that Merkel is ready for drastic measures is completely wrong. She does not want to make the necessary steps, and the mainstream media supports her ideologic approach, that I described on my recent blog post http://lostineurope.posterous.com/der-deutsche-moment on the “German moment”

Ulrich Speck 30th November 2011 at 11:11pm

@ Eric Bonse: Thank you for your response to my blog post. The nr. 1 issue in Germany in the last days was a) Guttenbergs attempt to come back on the political stage, b) a vote about Stuttgart21 in South-West Germany. You also get a sense for this if you look at the “most read” and “most commented” articles at German newspaper websites. And the latest Spiegel has the Euro crisis on the title, but starts with Guttenberg. I could add many, many more examples. And it also helps to read NY Times, FT and Reuters in parallel with the German coverage. But my main point is that Germans do not feel the same sense as urgency as others. They feel fine; and one reason for that is the way media are presenting the crisis. This in turn leads to a political situation in which Merkel has little support for drastic measures, because Germans do not feel to stand close to the abyss. Someone who has a similar perception as I have is Thomas Kleine-Brockhoff, read his blog post here: http://blog.gmfus.org/2011/11/sikorski-tried-to-puncture-the-german-echo-chamber/

Frank Butschbacher 1st December 2011 at 09:12am

It’s true, Germans (I am one) are reluctant to help, arguably way too reluctant. But it is interesting to note how many people see the best, and only, solution in the Germans opening their purses. So easy. Surely everybody else have done their part long ago? Investors stay clear of Club Med bonds, because the Germans won’t pay? How many billions does it take to bring, say, Italian bond yields down to bearable levels? And then again 12 months from now? So if investors don’t trust Italy, and others, the Germans are to bring in the trust? I am in favor of Germany doing way more, but I am less sure I like the role Germany is expected to play in Europe. Would you?

NWalton 1st December 2011 at 12:12pm

This is an important debate (also see Sebastian’s excellent piece about the evidence behind the German fear of inflation: http://www.ecfr.eu/blog/entry/view_the_german_fear_of_inflation), for the simple reason that elsewhere in Europe the big question is now trying to understand exactly why the Germans see things in such a fundamentally different way to the rest of us (EU17, EU27 and beyond), in a way that threatens to destroy the €, the wider European economy, potentially the global economy, and - this bit is crucial - the German economy as well. This blog post of Ulrich’s asks important questions about one key aspect of this - the public debate within the German media.

Ulrich Speck 1st December 2011 at 01:12pm

Just briefly another example from today. Headline in the perhaps leading national newspaper, FAZ: “Notenbanken spannen Sicherheitsnetz” - Central banks span security net. Headline in the New York Times: “6 Central Banks Act to Buy Time in Europe Crisis”. Both talk about the same events - but the German headline suggests that all is under control.
There simply is a growing gap between the discourse inside and outside Germany. Outside, growing nervousness, fear, panic, and more and more anger about lack of German leadership. Inside, growing anger over outside expectations, and perhaps a feeling that Germans do not need to bring sacrifices for saving the Euro.
Frank, yes, why should Germans pay? Why should you bring water to your neighbours house if it burns? First, because you don’t want that your house catches fire too. Second, maybe one day your house is burning, and you’ll need his help.
We see the crisis going from bad to worse, and we see all measures fail so far. Everybody agrees that the key lays in Germany.
But Germans seem to be not ready to handle that responsibility. What they do not understand is that they need to do more to secure the common foundation on which our economic and political order rests. Germans were lucky that others have played key roles in building these foundations, especially Americans with NATO, but also neighbours and partners with EU. Now Germany must take responsibility for these framework, but Germans hesitate. Their media and their leaders to a large extent fail to understand and explain what is at stake. There is a lack of compentence, and there is no cosmopolitan elite in Germany that would mediate between the view ON Germany and the view OF Germany. The danger is that Germany is not doing enough to stabilize the very foundations of its success because it does not realize how much it depends on the European order that has been built after World War II.

F.Meyer 1st December 2011 at 03:12pm

It is simply a lie that someone asks for German leadership. It`s money, nothing more. Do you really think that the discussion in Poland and the UK about a “4. Reich” is unnoticed? Everyone hates the Germans and now they are asked to be the saviours of Europe?

Übersetzung Deutsch Englisch 2nd December 2011 at 05:12pm

We see the crisis going from bad to worse, and we see all measures fail so far. Everybody agrees that the key lays in Germany.

Ulrich Speck 2nd December 2011 at 06:12pm

Quentin Peel, the FT’s Germany correspondent, is also surprised that Germans do not feel the crisis:

“The mood in Germany today seems quite different to that in most of the rest of Europe. The grim warnings of imminent apocalypse that pervade the pronouncements of politicians and pundits in London and Paris, Rome and Madrid, are barely to be heard in Munich or Berlin.

It is not as if people are not anxious. Germany would not be Germany without a healthy dose of angst. They are worried about the euro, and the safety of their savings. They are worried about government debt and the return of inflation. But they simply do not share the view that the eurozone is in imminent danger of collapse.

The biggest German story of the past three weeks has not been about the plight of the common currency, but something quite different: the discovery of a neo-Nazi terror cell, responsible for a string of racial killings over the past decade.”

http://www.ft.com/intl/cms/s/0/ed569f44-1b66-11e1-85f8-00144feabdc0.html

Ulrich Speck 3rd December 2011 at 09:12pm

In Sueddeutsche Zeitung, Germany’s biggest serious newspaper, Economic editor Nicolaus Piper says that Germans have failed to take into account the international debate about the Euro crisis. This was “a big mistake”, which led to a situation in which only bad option are left. Here my translation:

“It is important to distinguish between the domestic and the outside view on the the problem. In the German perspective, Angela Merkel and Wolfgang Schauble have, in the last months, saved what could be saved, without further encouraging the lack of solidity in the public finance of the Southern countries. According to large parts of the German public, they have done way too much.

From the American, the Chinese and the Latin-American perspective it looks different: For them the Europeans just did the bare minimum to prevent the downfall. Now they have only bad options left. The world and not only Europe now is at the beginning of a new, unnecessary recession. It was a big mistake not to take this outside view serious, because an important part of the reality has been willingly ignored.”

http://www.sueddeutsche.de/wirtschaft/globale-schuldenkrise-schicksalstage-im-dezember-1.1224537-2

Frank Butschbacher 5th December 2011 at 01:12pm

Ulrich, thanks for providing the fire brigade analogy. And yes, I AM in favor of the Germans doing (paying) way more. Didn’t I write that?
Yes, the Germans ARE complacent (ever were). But isn’t it nice that everybody agrees that it is German money that can mend what Greek, Italian politicians in the past and speculators today fu**ed up, and totally so.
I read surprisingly little about the contributions of those other interested parties. Take British banks and funds, exposed to mediterranean debt to the amount of 500 billion. What do they contribute, except having others write that Germany should pay more, and except talking the Euro down?
So again: I honestly believe the Germans should pay way more. At the same time, I’d be happy to learn who else committed what to save the Euro?
And just a second thought: The IMF helped out, and democracy is in effect suspended in Greece. Do we want to have Germany play a similar role? You tell me.

Ulrich Speck 5th December 2011 at 01:12pm

Frank, of course others should commit themselves as well. But every country should, in this crisis, think hard about what value the Euro and the EU have for themselves - not always point fingers on others.

My point in the above blog post is that there is pretty little discussion about these things in Germany - I mean not only reporting about what Merkel is doing, and on narrow instruments, but a public focus on what our interest in the Euro and EU are, in economic and political regard.

If Germany comes, for example, to the conclusion that the Euro is important for the political balance in Europe, and that otherwise German weight becomes unbearable for Europe, Germans should be ready to pay regardless of what others contribute.

Over the weekend, former chancellor Helmut Schmidt made a dramatic appeal to Germans to show more commitment towards rescuing the Euro. His arguments were mainly political.

My larger point is that Germany sometimes seems to be unaware that they need to contribute to the foundations on which their wellbeing is based. The EU is one part of this, NATO is another.

Germans often take these foundations for granted, and often think that their prosperity is only a result of their own virtues. But that is only the half truth. The other half is that we were extremely lucky that others provided us with international frameworks which made our success possible - American and also European neighbors.

These very foundations are at stake now. And if we talk about costs and prices, these things need to be included in our balance sheet.

ulrichspeck 12th December 2011 at 01:12pm

Dear Kimi, many thanks for your posting. I’m glad as well that I do not rule Germany, that’s rather a burden. But I also think that Merkel is not protecting the Germans.
My view is - and here I agree with Merkel - that the key problem is trust and confidence. Until two years ago, investors have assumed that a common currency means that investments in all participating countries are safe, backed by the union. The crisis broke out when investors started to doubt this assumption. Two year of crisis management by Merkel and Sarkozy have made things worse, and worse. Instead of building trust by taking responsibility, Eurozone leaders have demonstrated that the common currency is not backed up by a common governance structure.
You can argue that they were right to do as little as possible. But if there had been decisive action at the beginning, the signal would have been sent to investors that they do not need to worry.
Now we are at the brink of an disorderly breakdown of the Eurozone. This is currently the biggest risk for the world. And this is were Merkel and Sarkozy have led us. I’m not sure whether one could say that this protects the Germans from risks, it seems to me that Germans now are exposed to many more risks than two years ago.
One could however argue that this is not Merkel’s fault, that she was on a mission impossible. One could say that a currency needs a state, which necessarily leads to a breakup or to a federal union. A breakup is a disaster, and for a federal union there is no political will. But nevertheless, I would say that Merkel could have done better.

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