Chancellor Merkel’s position on BCE bailout and Eurobond is not only her own political and economic vision, but also the mark of German historical approach.
Germany has always been a keen supporter of both economic and political integration in Europe: after the end of World War II, that was the price to pay in order to show real commitment to peace in the continent and re-gain international credibility.
During the 1950s, 1960s, and 1970s, however, Germany has always put national financial stability and budgetary responsibility at the top of the country’s European agenda, delaying any step for a monetary union, on the basis that the political union and the sharing of large parts of budgetary and fiscal sovereignty should come first.
Even a Chancellor who can’t be defined as a nationalist, Willy Brandt wanted political integration and shared sovereignty to come ahead of any monetary integration.
Only at the beginning of the 1990s, Germany gave up its principles, accepting to sign the Maastricht treaty (and the new monetary union) without any guarantee for a strong centralised system of economic governance: Helmut Kohl surrendered to French and European pressure, in exchange for the unification of the two Germanies.
After that capitulation to Realpolitik, Germany never gave up its idea of economic stability and national responsibility towards the EU: those principles clearly drove the German government and the Bundesbank during the European Monetary System of 1992, during the row on budgetary stability between Kohl and Chirac in 1996, and during the creation of the new currency.
Many in Germany still think that Kohl’s mistake is one of the reasons for the current crisis.
Angela Merkel thinks that every national government should be responsible towards the national electorate for the financial situation of the country and that European Union should put this principle (rather than that of European solidarity) at the heart of any further economic integration.
This is a national vision and any other German Chancellor would have the same approach: the Social Democrat opposition is one of the biggest risks that Angela Merkel will face after the compromises she was forced to accept at the last European summit in Brussels.
Furthermore the Chancellor believes in a stronger political integration as a condition for the economic and financial integration: Germans are not ready to share their budget without sharing political responsibility on that budget.
In spite of the intense pressure from much of the other EU countries, as well as the European Central Bank, the International Monetary Fund, and the President of the United States himself, German chancellor cannot shift her political position. As the recent European Council meeting demonstrates, she can accept compromises, but always with the aim of obtaining her long term objectives and to have her vision prevailing: she may have lost the battle in a summit, but she will continue to dictate the terms of the project that Germans have for Europe.
It is not a question of personal credibility; it is a matter of historical national approach.