by Guido Westerwelle, German Foreign Minister
Reviewed by David T. Jones
On January 20, during a public session at Brookings Institution in Washington, German Foreign Minister Guido Westerwelle offered his “take” on the topical concern of the future of the Euro. Westerwelle’s presentation was sandwiched between meetings with Treasury Secretary Geithner and Secretary of State Clinton so it received considerable media and audience attention. He proposed to address four fundamental questions: the nature of the crisis; what we are doing; what is Germany’s role; and what does it mean for the United States.
Westerwelle sees the Euro crisis as a multifaceted construct of failed trust in financial markets, excessive public and private debt, and inadequate economic competitiveness. Current objectives are both to “fix” the Eurozone and put all members on “a path of fiscal responsibility.” Long term solutions are imperative; otherwise, the crises will repeat. It is not a short term problem—and short term efforts will be credible only if long term problems are addressed, too.
He noted the German commitment, proportionally equivalent to $1 trillion, to reinforcing Eurozone liquidity and asked hypothetically whether the U.S. Congress would commit such a sum to assist foreigners. Concurrently, he noted the need to fix elements of the Eurozone construction, and suggested near term agreement on new arrangements for fiscal responsibility to “significantly strengthen policy coordination within the Eurozone.” For Germany, Westerwelle emphasized, there was no good future without a good future for Europe.
Speaking personally, he recalled a defining teenage experience with a stricken older French woman still traumatized by World War II. Germany is fully committed to a united Europe. “Going it alone is not an option…”And for the United States? Essentially, we each remain the partner of first choice for the other. The multifold challenges we face are most effectively faced together—and the legitimacy of our economic system is not the least of them.