Germany and the Eurozone
Sharing the Refugees, but Not the Financial Risks

In the wake of the Greek debt crisis, Germany has a message for the rest of Europe: don’t put us on the hook for any more of this. The Financial Times reports:

Germany is determined to halt plans for the eurozone to pool more financial risk, in a challenge to a Brussels-led push to deepen single currency integration after the Greek crisis.

Despite calls from France, the European Commission and European Central Bank for a common system to protect bank deposits, Wolfgang Schäuble, the German finance minister, will tell eurozone counterparts on Friday that it would be wrong even to discuss such measures before more discipline has been instilled in debt markets.

According to a document circulated to finance ministers and seen by the Financial Times, Berlin in effect insists on weakening the rights of investors in bank and sovereign bonds so that they — rather than taxpayers — foot the bill for bailouts.

Greece has been leading the charge for mandatory refugee quotas and burden-sharing on that front. But shared financial liabilities? Nein, danke.

Everybody wants a Europe a la carte—and everybody has a few red lines. Unfortunately, the net result is a Europe whose institutions increasingly do not work—and a Europe in which no nation, including Germany, seems to have enough political capital or will to really make them.

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