European Debt Crisis

Euro debt crisis has deep roots

Stephen Beard Dec 7, 2011

Steve Chiotakis: Well the European crisis has many causes of course. Excessive debt, uncontrolled public spending… and Adolf Hitler.

Yeah, as Marketplace’s Stephen Beard reports, some of the roots of Europe’s current economic woes can be traced back to Germany’s infamous and murderous leader.

Stephen Beard: If you’re looking for someone to blame for the eurozone debt crisis you could start with this man: Adolf Hitler.

It was after the death and destruction caused by Adolf Hitler and his regime in the 1940s that Europe set off down the path that led to the common currency. Economist Andrew Hilton:

Andrew Hilton: We wouldn’t have had the euro had it not been for the experience of the second World War and the determination of a generation of European leaders after the war to make sure it didn’t happen again.

For forty years after the war, West Germany forged an ever-closer political and economic union with its neighbors — eliminating trade barriers, harmonizing regulations. Largely to atone for the horrors that Hitler had unleashed, the Germans submerged themselves in Europe. But then in 1989 came a thrilling but destabilizing event.

The fall of the Berlin Wall posed a dilemma: the prospect of West Germany reuniting with its eastern territory.

Jan Randolph is with IHS Global Insight.

Jan Randolph: That would not only bulk up Germany economically, it would also make Germany a political power again — a more assertive, self-interested political power.

And that rang alarm bells most loudly in France, which had been a major target for Hitler’s agressioin.

Charles Grant of the Centre for European Reform says the French insisted the Germans bind themselves even more tightly to their European partners.

Charles Grant: The French said, “Sure you can be re-unified, but let’s make quite certain that you’re going to agree to give up the deutschemark and take part in a common currency, aren’t you?” And the Germans, with some reluctance, said yes.

Hitler’s baleful effect can be seen everywhere in this story. Because because of his legacy, it could be argued the Germans have dithered during the current crisis, reluctant to play a dominant, decisive role.

In London I’m Strephen Beard for Marketplace.

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