Politico-Europe had a piece last week that talked about Germany’s putative responsibility to help the southern European EU nations during the current Wuhan Virus situation. Buried in the piece was this bit of eurozone political-economic history:
The euro was sold to Southern Europe, which had been less successful than the north for decades, as a path to lasting prosperity. By eliminating exchange rate risk and lowering interest rates, Southern Europe would become more competitive.
But after the initial economic boost that followed the euro’s introduction, the picture for the region darkened. Though countries that had historically high inflation benefited from lower interest rates, the cheaper financing had the unintended consequence of removing the pressure on governments to enact economic reforms.
The bottom line, though, the inconvenient bottom line is that the politicians manning those governments chose not to enact the needed economic reforms. The reduced pressure to do so is not relevant to the simple fact that the reforms were and are needed, and those politicians, of their own volition, chose otherwise.
Yet this is, somehow, Germany’s fault.
Do Germany—and France, and the other wealthier nations of the EU—have any obligation toward these profligates? From a humanitarian perspective, of course, can any aid be delivered directly to the people and their businesses, bypassing their governments entirely. But even here, with strings attached: it is these same people, after all, who keep electing those fiscally irresponsible politicians.
From a political perspective, no, the wealthier nations have no responsibility.
