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Germany's pole position in the handling of the euro crisis is evident from the fact that everything is on hold until after the German elections. However, the absence of diversity and depth in the German debate on the euro crisis is striking. The inaccurate 'lazy southerner' narrative dominates public and private discussions, and the need for austerity is taken asa given. 'Fuzzy' matters, such as the danger that sharp fiscal adjustment poses to social cohesion and political stability in crisis countries, get short shrift.
Meanwhile, the fear of inflation and moral hazard remain the biggest German bugbears, leading it to veto sensible proposals such as a banking licence for the European Stability Mechanism (ESM) and the debt redemption fund proposed by its own council of economic advisers. Politically, Germany has repeatedly allowed parochial domestic considerations to delay and water-down steps needed to tackle the crisis.
Germany's failure to provide economic leadership is equally stark and on structural reforms, too, it has failed to lead by example. It is resting on its laurels and has implemented few of the necessary structural reforms of its own in five years. Ignorance of, or worse, indifference towards finance has manifested itself in German positions on bank bailouts, debt restructuring and that little matter of a Grexit.
True leadership involves promoting collective good over parochial self-interest, being long-term oriented not short-term expedient, being magnanimous not petty, forgiving not blaming, decisive not procrastinating, and opening yourself to new ideas by rejecting long-held prejudices. In Germany's defence, no one expects any other 'ordinary' Member State to be capable of this kind of leadership. It is a thankless job, but a necessary one. It will carry huge risks and no guarantee of success, but the biggest risk lies in doing too little, too late.
Debate on Germany's role in Europe by the Economist