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'Austerity dictator'

Nina HaaseMarch 26, 2013

Europe's biggest economy pays the largest amount in eurozone bailouts, but it's become the symbol of harsh loan requirements. Its bad image highlights the need for further integration of the eurozone, experts believe.

Image: AFP/Getty Images

In the early hours of Monday morning (25.03.2013), the group of the 17 finance ministers of countries that share the single currency unanimously decided to grant Cyprus financial aid to avert bankruptcy. The green light followed more than a week of intense negotiations between Cypriot representatives and the troika of international lenders (the European Commission, the European Central Bank, and the International Monetary Fund). But - like so many times before when an important decision was made in Brussels - all eyes were on German finance minister Wolfgang Schäuble, who many saw as the one who could make or break Cyprus.

Since the beginning of the eurozone crisis, the picture has been the same in many countries: angry protesters carrying banners with a picture of German Chancellor Angela Merkel with a Hitler moustache or a swastika. Opponents of austerity measures use Nazi comparisons to get their message across - be it in Greece, Italy or Cyprus.

A euro coin
Cyprus faces tough times. Because of the German finance minister?Image: picture-alliance/dpa

Anti-German sentiments in Europe culminated last weekend when a regional edition of the Spanish newspaper "El Pais" published an article on its website in which a Spanish economics professor compared Angela Merkel with Adolf Hitler. "Like Hitler, Angela Merkel has declared war on the rest of the continent, this time to secure economic Lebensraum," wrote Juan Torres Lopez from the University of Seville. The article has since been removed due to "editorial slip-ups."

"It's an issue of who has the strongest influence in the systems," was how policy analyst Janis Emmanouilidis of the European Policy Center, a Brussels-based think tank, explained Germany's natural leading role. "Everybody looks at Germany because of its size and because Germany has been weathering this crisis better than others. Germany's voice is the strongest and matters most," he told DW in an interview.

'Pedantic Prussians'

But "the Germans" had become a "watchword for domination or discipline or austerity" in the eurozone, according to Derek Scally, a Berlin-based correspondent for the "Irish Times" newspaper. Scally has lived in the German capital for 13 years and has published several articles on Germany's growing image problem in times of crisis. "Many have this notion of the pedantic Prussians who are very clear on rules. Rules must be obeyed and to hell with what's happening in the political reality."

The media in many European countries, said Scally, had played a key role in fostering this image. When all was well, the domestic political debate in Germany was largely ignored by outlets in other EU member states, he said. In times of crisis, "all they have to draw on is German stereotypes or prejudice based on how they think Germans do politics." They generally ignore, for example, government reports that highlight the rising poverty in many households in Germany.

Merkel and Hollande
In the public perception, French President Francois Hollande stands for growth, Merkel for austerityImage: Reuters

Germany's history singles out the country in many ways and makes it an easy target for accusations - not least because of its Nazi past. But the finger-pointing has been going both ways, Emmanouilidis said. Germany wasn't careful enough with its tone in the debate when the crisis first hit Europe. "If you have Chancellor Merkel indicating that Greeks work less - that portrays a certain picture," he said. "I think she would not do that again but she did say it in a speech ahead of regional elections."

'White knight core countries'

The German government has been in a genuine dilemma ever since it first had to communicate its strategy in the crisis, journalist Derek Scally said. "They're really caught between a rock and a hard place," he told DW. "How do you go out and sell your view and how do you make the case for what you wanted without being seen to be a dominating country? They're damned if they do, and they're damned if they don't."

Emmanouilidis said that smaller rich countries were comfortable only with their role of supporting Germany behind the scenes. "It's convenient for some in the Netherlands or in Finland to hide behind the Germans."

Germany therefore takes most of the blame for what can be called the 'northern narrative' of the crisis. Leading German tabloids and politicians added fuel to the fire by openly calling for a Greek default before the country received financial aid from its European partners. "The German reading of the crisis is that there were these periphery countries who overdid it in the last ten years and now it's up to the white knight core countries like Germany to bail them out," Scally said. For obvious reasons, that message hasn't gone down well with countries in crisis.

Observers say the extent to which Germany itself depends on the euro for its own economic survival has been neglected in the public debate in Germany - even if Angela Merkel has repeatedly stressed the link between the euro's future and the future of the European Union as a whole. "In a complicated interlinked financial system, there are capital flows going back and forth," Scally said. "And the notion that perhaps German pension funds or German banks had excess capital in the last ten years and were quite happy to invest in these periphery countries because they felt it was a good deal and it all went wrong - that's been left out."

Systemic flaws

But Germany's problem highlights a more general problem for the eurozone. The country is holding general elections in September this year. With 17 countries in the eurozone, there's almost always an election campaign going on somewhere. And the national narrative about causes and possible solutions of the eurozone crisis is still largely determined by domestic political interests in every country.

Riots in Greece
Riots erupted when Angela Merkel visited AthensImage: AP

That's why observers agree that Germany can't solve its image problem on its own. Instead, the pictures with Angela Merkel in a Nazi uniform highlight the systemic flaws of the eurozone, which need to be corrected, Emmanouilidis said. He said he was hopeful that the European Union would now increase the speed at which it is moving towards further integration and towards a banking union. If that had been in place when dealing with the problems in Cyprus, he is convinced, the hurtful blame-game could have been avoided at least in the case of Cyprus.

Scally agreed: "In any crisis situation - particularly a complex situation - there's always an understandable wish to blame others and exonerate oneself," he told DW. "But the notion that there are innocent parties and guilty parties, and that it's all white and black is rather simplistic. Any politician who suggests that for domestic political gain is undermining the project as a whole."