Some argue that no German chancellor could have held on to the office while behaving much differently in the realm of economic policy. Given a deep cultural proclivity toward thrift, moral revulsion over debt and a fear of rising prices dating to the hyperinflation after World War I, Germans were aghast at any arrangement in which their savings were on the hook for the recklessness of Greeks and Italians.
“She had to sell German voters on the idea that Germany would send resources to bail out European countries that were already engaged in irresponsible policies,” said Nicola Borri, a finance professor at Luiss, a university in Rome. “That was the problem. Politically, it’s really hard to criticize Merkel.”
In Mr. Borri’s view, Italy and other nations on Europe’s southern periphery did receive a significant infusion of wealth from the north when the euro was created nearly two decades ago. Investors began lending money to Italy, Spain, Greece and Portugal at rates that were practically the same as those in Germany, no longer demanding a premium for extra risk. Here was a choice dividend from sharing a currency with Germany and its rock-solid credit.
“These are de facto transfers from rich to poor countries,” Mr. Borri said. “Rather than use this money to reform their economies, these countries increased their spending.”
But other economists say Ms. Merkel squandered an opportunity to use the crisis as a teachable moment that could have altered German public opinion. She might have fostered a sense of responsibility in Germany to see the nation as a primary beneficiary of the European Union, with the responsibility to aid those in distress.
Instead, she catered to stereotypes of lazy Greeks, at one point suggesting they take too much vacation. She used their troubles to inaccurately depict the breadth of the crisis. Though Greece’s government had been profligate, those in Ireland and Spain had enjoyed budget surpluses before they landed in crisis, falling into perilous debts only after bailing out banks.
Europe’s economic troubles have frequently centered on a dearth of faith in the endurance of the euro, the currency shared by 19 members of the bloc. Since the euro’s inception, critics have warned that it is structurally unsound — a currency union lacking an accompanying political apparatus to coordinate policy and collective aid when trouble emerges.