German public opinion needs to get over itself

 I've already mentioned how German public opinion about the economic crisis in southern euroland annoys me. “Poor naïve Klutzes” my foot. The truth is that Germany has greatly benefitted from being able to force its eurozone partners into a monetary policy that generated speculative bubbles and drove up their price levels. A nice essay on the topic can be found here.

One thing that I do not understand are the strange allusions that Germans might benefit from leaving the eurozone. Their exchange rate would rise, making their exports uncompetitive and reducing the value of their substantial holdings of foreign assets. I suppose that those assets, denominated in euros, would be a bit safer at the new values ... but I am still not seeing it.

I do not know if Spain can survive inside the strictures of the eurozone. I suspect that it can, but I do not know. I certainly am beginning to revise my priors on the worth of the single currency. That all said, I still find the sanctimonious German attitude most annoying. The bailouts will not cost the German taxpayer a nickel, the PIGS will be forced to reform their labor markets, and Germany will continue to enjoy the benefits of export competitiveness for several years to come. The worst thing that could happen to Germany would be slightly higher inflation ... and that would be a good thing for German pocketbooks, if not for Germany’s pathological public opinion. I mean, when the head of the Austrian central bank calls German inflation fears “hysterical,” then something is wrong.

Comments

[bph]

Inflation concerns, whining about making loans which will be paid off in their own currency and with interest, sanctimonious talk of bailouts, who are these people, Americans?

[Noel Maurer]

Laugh out loud!

But ... I am not a member of the American political party that worries right now about inflation, whines about loans in domestic currency, or gets sanctimonious about bailouts. So, not Americans, but respectable Republicans.

The corollary, though, is that I may be making the same mistake on which your joke hinges: conflating a large subset of a country with the majority. There may be a big part of German public opinion that isn't getting all weird about the eurocrisis. After all, parliament did accept the package, and the shadow of Helmut Kohl still looms large.

Am I misunderestimating German public opinion?

[bph]

The small subset of German public opinion I know is not representative, but I figure you are not asking me but rather DM.

I have known plenty of conservative Northern European types who easily stray into stereotypes about the south, though usually Italy is usually the "bad guy". This makes me wonder how much these fiscal issues play into a certain established narrative.

Also, your co-blogger got noticed by DeLong (but not for his awesome election blogging.)