Angela Merkel’s Failure of Leadership

In the manner of newspaper articles, this Steven Erlanger piece from yesterday gets a bit confused as it tries to weave three separate points together, but it does a good job of moving beyond Greece-bashing to note that there’s been a catastrophic failure of German leadership here:

Mrs. Merkel has been the central figure in the debt crisis, as she has tried to respond to German voters’ displeasure at having to bail out Greece, after years of bailing out eastern Germany. She delayed action on the problem for months, hoping to put it off until after critical regional elections on May 9.

Ultimately, that proved impossible. But her foot-dragging, combined with her insistence that Greece pay a severe long-term price for its profligacy and that the German Parliament approve any bailout, gave the markets both reason and room to run up the price of Greek debt to unsustainable levels. That forced the International Monetary Fund and the Europeans on Wednesday to practically quadruple the commitment to Greece, to try to calm the markets and not turn their attention to Portugal, another weak reed.

“The fact that a German regional election can play such a disproportionate role in messing up efforts to contain what was a much smaller crisis several months ago is astonishing,” Mr. Kirkegaard said. And the fact that there will be no European Union summit meeting until May 10, after the German elections, “is so blatantly political,” he said.

There’s a relevant contrast here with how Bill Clinton’s administration dealt with the need for a Mexico bailout in the late-1990s. There, too, the problems were in a sense “Mexico’s fault” and opportunistic politicians could portray it as hardworking American dollars going to rescue irresponsible sun-baked types. But it would actually have been quite bad for the US for Mexico to go bust, so the Clinton administration sucked it up and did the right thing for the United States—which also happened to be the right thing for Mexico. Merkel’s unwillingness to challenge the framing of Germany being asked to make a charitable contribution to a wayward cousin has made both the politics and substance of this worse.

Europe is probably going to be a mess for years, which you’ll hear American rightwingers say is a consequence of universal health care or some such, when in fact we’re largely looking at the bad consequences of conservative hard money policies.