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Merkel to Visit Greece

In Europe these days they tell a joke about Angela Merkel landing in Paris and being questioned by a customs official as she gets off the plane.

“Occupation?” asks the official.

“Not this time,” she says. “Just a visit.”

They will be laughing bitterly about this in Greece this week; as the WSJ reports, Chancellor Merkel is coming to Athens for her first visit since the euro crisis began. She isn’t bringing the Bundeswehr or even a team of repo men; she was invited by Greece’s prime minister (Antonis Samaras) and the trip is intended to repair strained Greco-German ties.

That may be hard to do. The German public still sees Greeks as a bunch of lazy, spendthrift grifters out to pick the pockets of hardworking German taxpayers: Zorba the Mooch. And the Greeks see the Germans as hard hearted, humorless and inexorable creditors intent on driving millions of Greeks into poverty as they squeeze the indebted country until the pips squeak.

Both countries have legitimate grievances. Greek irresponsibility, entrenched corruption and, yes, conscious lies to the European Union led directly to the crisis, and Germany and all Europe have every reason to be angry at Greeks and to disbelieve whatever their leaders say. The record is long and clear. But the Greeks too have a point. The foolish design of the euro is the root cause of Europe’s problems, and the idiots who built the euro and rammed it through weren’t Greek. German and French stupidity and policy failure is the heart of Europe’s crisis now, not Greek corruption and guile.

Beyond that, the debt crisis couldn’t have happened without the full involvement of European banks. German and French banks, together with many others in the “virtuous” creditor countries made hundreds of billions of bad loans to the Club Med countries and Ireland. The “Greek bailout” is really as much a bailout of German and, especially French banks as a bailout of Greece. It is not at all clear that squeezing the living standards of Greeks to protect the German and French financial systems is just or wise policy. The political establishments in the creditor countries want voters to be angry at Greece and Spain rather than turn their wrath on the incompetent politicians and bank regulators who allowed the European financial system to turn into a cesspool of sour loans.

Greeks resent being made to pay such a high price for what was really a pan-European folly, and they have a point.

Chancellor Merkel is unlikely to take on these issues directly in her visit to Greece. Europe is still too deep in denial about the sources of its current problems for its leaders to engage in genuinely honest dialog with the public. She will not say to the Greeks that the euro was a ghastly mistake inflicted by Mitterand and Kohl on Europe as the price of French agreement to German unification. But Prime Minister Samaras has managed to build some trust among his European colleagues, and Germany seems willing to give him at least a little bit of comfort in the form of a few visible concessions as a reward for his willingness to keep Greece more or less on the policy track its creditors have laid out for it.

Merkel hopes that her visit can begin a slow process of reconciliation and healing in Europe. Via Meadia hopes she is right; for both geopolitical and economic reasons, the United States wants the European Union to succeed. But building a united Europe after the Cold War was never going to be easy, and the failure of the euro has made that job harder than it needed to be.


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