After five years, in Greece the crisis is not over yet. In fact, the situation is getting worse day by day. According to a growing number of observers, economists and politicians, the blame lies with the aid plans imposed by the Troika: too much austerity, little time and lack of true solidarity.
Critics of the Greek cure believe that, in principle, the burden of the adjustment should not fall solely on the debtor. Creditors must also do their part because it is evident that it is in their interest not to bankrupt the debtor. Therefore, we might as well help countries in difficulty, rather than imposing exhausting and impossible treatments on them. In essence, even “virtuous countries” have to do their homework and fix their imbalances. There Germany, for example, has a trade surplus that has exceeded 7 percent of GDP for years now, and therefore should implement expansionary fiscal policies to increase domestic demand, and thus contribute to reducing the competitiveness gap with peripheral countries. In a monetary union, the latter cannot leverage the exchange rate (devaluing it) and therefore it is up to the creditors to act, generating inflation.
Leaving aside the fact that this thesis does not consider the fundamental role of reforms on the competitiveness of a country, in reality, Germany is making its contribution to the stability of the euro area, also because, due to the way the European governance, escape is not so easy. And she did it mainly through two paths.
First, through wage increases. To give just one example, earlier this year the metalworkers' union IG Metall obtained an average increase of 3,5 percent for its members in Baden-Wurttemberg, well above inflation (in February l consumer price index grew by 0,9 percent month-on-month and 0,1 percent year-on-year): an arrangement that will, in all likelihood, serve as a model for contract renewals of more than 6 million of workers expected by the end of 2015. To this must be added the introduction of the minimum wage (8,50 euros per hour), strongly desired by the Social Democrats and which took place in 2014. The effects on consumption are beginning to be seen. The GDP in the fourth quarter grew by 0,7 per cent, compared to the previous quarter, thanks to the contribution of aggregate demand: a trend expected to strengthen in the first part of the current year.
Secondly, through the "despite" acceptance of the use of unconventional monetary policy tools, such as the Quantitative Easing. We got there gradually, making the Germans digest intermediate instruments such as l'Outright Monetary Transactions (OMT) still never used because it can be activated only if the requesting country participates in a rescue program (and therefore agrees to sign a Memorandum of Understanding with the Troika); or the Security Market Program (SMP), launched between 2010 and 2012, and which proved to be fundamental in controlling spreads thanks to the purchase of about 200 billion in government bonds, almost half of which were Italian. Both tools were perceived by the public as a violation of the no bail-out clause, i.e. the clause of the Maastricht Treaty which prohibits the direct financing of states and, in fact, there has been an avalanche of appeals, - never happened before -, to denounce what in Germany is considered an "illegal use" of monetary policy.
Also on the launch of Quantitave Easing, the Germans have tried to assert their motivations: useless, ineffective, prohibited by the Treaties, and, above all, a real gift to the countries of Southern Europe, which will be able to benefit from spreads and lower interest rates (just the announcement of the operation caused them to drop substantially) and a devalued euro: an excellent excuse to slow down, or even interrupt - the reform process.
A weak euro is certainly also convenient for Germany, but what really isn't convenient are interest rates that are even lower than those already existing before Quantitative Easing. In fact, the more the rates fall, the more problematic it becomes for the insurance companies which have to finance their commitments with defined premiums. In 2013, the Bundesbank estimated that in the event of a prolonged period of low rates, more than 10 percent of life insurance companies would fail to meet regulatory requirements by 2018 and more than a third by 2023 – a dramatic scenario considering that life insurance policies are one popular instrument in Germany
However, despite Germany's firm opposition – Bundesbank president Weidmann never missed an opportunity to express his dissent - Quantitative Easing was launched at the beginning of the month.
In essence, the European marjoram line prevailed over the German one. Exactly what is happening with Greece, which found itself alone against the other 18 euro countries opposed to its requests. When Alexis Tsipras he claims to have received a mandate from the Greek people, in fact he underestimates the role of the mandate that the more than 500 million European citizens conferred on the Brussels institutions (Parliament and Commission) in May last year. In a monetary union, which is moving towards greater political integration, contributing to the stability and growth of the area also means accepting being outvoted, as the Germans did with Quantitative Easing.
