Why the Euro Baffles America

For American Europe-watchers, the political maneuvering on the continent in response to the economic crises of the Eurozone is reminiscent of the two-party narratives of U.S. domestic policy. The conflict between the Republican desire to balance the budget, on the one hand, and the Democratic habit of Keynesian deficit spending, on the other, maps easily onto the European drama playing out between German Chancellor Angela Merkel, cast in the role of the austerity queen, and—with few exceptions—nearly everyone else. (Of course that generalization is not fair: on occasion David Cameron, the British Prime Minister, leaders from Finland, the Baltics, Slovakia and, famously while he was still in office, French President Nicolas Sarkozy, express some allegiance to the camp of fiscal discipline). The predisposition to read Europe through American eyes, especially in the lead up to the U.S. presidential election, is understandable but inaccurate. The misperception has been amplified by occasional finger-pointing by President Obama and Treasure Secretary Timothy Geithner, both eager to lecture the Europeans on how they should behave. Not surprisingly, the American administration’s homilies carry as little weight in today’s Europe as they do elsewhere in the world.