Germany has failed by arms to cope with this bad strategic situation. But Germany's dominant economic position may allow them to leverage money for political power:
Taking a firmer tack would allow Germany to achieve via the pocketbook what it couldn’t achieve by the sword. But this policy has its own costs. The eurozone as a whole needs to borrow around 2.2 trillion euros in 2010, with Greece needing 53 billion euros simply to make it through the year. Not far behind Greece is Italy, which needs 393 billion euros, Belgium with needs of 89 billion euros and France with needs of yet another 454 billion euros. As such, the premium on Germany is to act — if it is going to act — fast. It needs to get Greece and most likely Portugal wrapped up before crisis of confidence spreads to the really serious countries, where even mighty German’s resources would be overwhelmed.
That is the cost of making Europe “work.” It is also the cost to Germany of leadership that doesn’t come at the end of a gun. So if Germany wants its leadership to mean something outside of Western Europe, it will be forced to pay for that leadership — deeply, repeatedly and very, very soon. But unlike in years past, this time Berlin will want to hold the reins.
Stratfor doesn't think the third option of just writing checks but demanding no political power in return is terribly likely.
I must say that I'm conflicted. My head tells me that I should favor German intervention to write the blank check to stop the crisis spinning out of control in the Balkans. Our fragile economy and winter of Spendageddon means that we can ill afford financial collapses in Europe.
But failure by Germany to act could doom the European Union as a political entity, and in the long run I think we'd be better off without the EU as anything more than a free-trade zone. So my heart tells me that I hope Germany refuses to save the Mediterranean states that are spending like drunken sailors on shore leave.
I just don't know enough to judge the pros and cons of the situation. I will be relieved if Germany heads off collapse. But I'll hope for the best in the long run if Germany doesn't.
I must say, that if the French and other countries grant Germany more power within the EU in exchange for the money, I expect these same countries would want a stronger US role in NATO to help keep the Germans down, as the old saying goes.
But it will be a very important decision that Germany will make (or fail to make) very soon.
