Germany’s Merkel drives home need for Europe’s strugglers to reform

http://www.washingtonpost.com/business/markets/germanys-merkel-drives-home-need-for-europes-strugglers-to-reform/2012/01/25/gIQAjhgxPQ_story.html

This article is one of the continuing focus on German chancellor Angela Merkel with regards to her stance and leadership with the European debt crisis.  As Europe's economically strongest and largest nation, Germany, coupled with the French, have taken leadership positions and Europe and the world wait tensely.  Merkel is trying to take a pragmatic approach to getting Europe on efficient austerity measures.  She does not believe that increasing the amount europe is borrowing for the IMF with be successful; “It makes no sense if we keep promising more money but don’t combat the causes of the crisis.”  She also does not think that creating "eurobonds" would be beneficially and not worth the squeeze so to speak, as it would drive up Germany's comfortably low borrowing costs.  Merkel instead believes that searching through Europe's financials searching for money to attempt to tackle high unemployment in economically struggling countries.  She references Spain specifically saying that unemployment with their young adult demographics is one issue to focus on.  She stresses work force and human capital development and that trying to get out of debt by taking on new debt does not make sense.


I find it really interesting to see how Europe has put themselves in an economic whole.  I do not know enough about the situation but what did a best case scenario for the Eurozone look like?  Was it reasonable to think that everyone would be flushed with money and growth.  Also the social and historic dynamics behind the situation.  It is almost comical to think that Germany and France and working so hard to try and fix the fiscal problems of Greece and Spain, et al.  Why should they care? How tied together are all the countries now?  What would happen if Germany said forget you all and just go back to the Deutsche Mark?