A rather irrational attack on Germany's economic policies by the French minister of economic affairs appeared last week in The Financial Times. Christine Lagarde accused Germany of "squeezing salaries to boost its trade surplus at the expense of euro zone partners," during a time of high budget deficits and sluggish economic recovery across the euro zone.
Here, Ms Lagarde is essentially accusing Germany of protectionism.
The Gaul to complain
In fact, Germany has a hugely successful, high-quality export economy, which is the engine that not only keeps Germany running, but arguably the whole of the EU in these dire times.
Does Ms Lagarde really care so much about the welfare of Greece, Italy, Portugal and other struggling economies in the euro zone to rush to their aid by making such blunt statements? Highly doubtful. This political outburst was arguably one on France's behalf, and France's behalf only.
Fighting off the French ambush, Rainer Brüderle, Germany's minister of economic affairs, said a day later that, "For countries that in the past lived off their entitlements and neglected their competitiveness, to point their finger at others is humanly and politically understandable, but still unfair." And this is putting it mildly. A statement such as that by Ms Lagarde, directed at the country that in the case of a collapse of one of the weaker economies of the euro zone is likely to pick up a large part of the bill is, to say the least, out of place.
A spokesperson for German Chancellor Angela Merkel commented that it is better for Europe to think about a unified growth strategy rather than to oblige some states to artificially hold back to the benefit of the weakest. And rightfully so, for, if that is what Europe is about, we had better stop it right here, right now.
Don't mime the French
What does this dispute really show? First of all, that in times of crisis and hardship in Europe, everyone is on their own. More importantly, though, it shows that we might need to be wary of the French model of economic and monetary policy, which is too focused on public incentives, protectionism and political meddling with money matters.
Seven years into Frenchman Jean-Claude Trichet's reign over the European Central Bank (ECB), the euro is weakening in comparison with the dollar and years of corruption, lies and mismanagement in Greece and other countries threaten to bring down the entire construction of the euro zone.
The ECB is unstable because it is a political instrument along the lines of the French model. If we want to expand it, we need to fix it first. And Poland would be well advised to insist on a radical review of the euro system, something along the lines of the US model, before it even considers joining.
