German Bail Outs Why Germany

German Bail Outs

Why Germany Should Help Other States Get Out of Debt

There are several reasons why Germany should help other states get out of debt. Germany is still morally indebted to Europe based on the events of the first half of the 20th century, it has helped to create the current crisis and thus bears some of the burden for finding the resolution, Germany has the means and system to help without risk to its own welfare and Germany is now part of a conglomeration of nations where each must step forward to help the others when it can.

For centuries Europe was a geographic entity comprised of many different peoples and nations that more often than not were at war with each other. Often Germany was in the middle of the combat. For Germany to now be the economic leader of Europe, now a unified political coalition called the European Union (EU) and to be taking the lead in bailing out one its European comrades, Greece, is indeed ironic.

It is axiomatic that Germany owes Europe a high debt. Twice in the 20th century the Europe and much of the world was torn apart as a result of German aggression. Countries were invaded and subjugated to German rule, civilian life across Europe came to a stand-still and infrastructures and economies were decimated- all in the name of German unification and nationalism. Historic and glorious cities, like Paris, Brussels and Athens were overrun and forced to fly the banners of imperialism and fascism. Today, some sixty years after the last of German hostilities, Germany still has a duty to serve Europe when the need and opportunity beckon.

Germany has established the largest export surplus of all European nations by depressing its labor costs and artificially lowering its own domestic demand. Germany trades heavily with the Mediterranean countries and thus owes much of its present prosperity to the same Greek state it has already "bailed out." This German form of mercantilism has been labeled as called "predatory" by other European economists and officials. Thus Germany bears some of the burden for the decimation of Greece's economy, and that of other European states, to begin with.

During its bailout of Greece, Germans banks do not have to incur any costs. In fact, German banks are buying high-interest bonds that are effectively guaranteed by the euro-zone governments. The best part of this plan for the banks is that German taxpayers are guaranteeing the interest and the amortization. While only time will tell if this plan works in the long run, it is appears successful enough to implement in a second country, if necessary. Thus a continued bailout is not only in the best interest of the EU, it is also in Germany.

Finally, providing funds for others states to get out of debt is the only way to ensure the stability of the euro and the EU. In another ironic twist of fate, commentators, academics and politicians have concluded that the best way to reign in post-world war II Germany was to create a strong European partnership with Germany in a central position of power. Lack of political and economic stability has been a recurring cause of strife and hostility throughout Europe's history. Creating stability throughout Europe by way of bailouts is in the best interest of both Germany and the EU.