Oliver Marc Hartwich, Centre for Independent Studies

There has been much commentary about why German chancellor Angela Merkel is wrong in her dogged determination to impose austerity measures across Europe. And Oliver Marc Hartwich has another column in Business Spectator today expressing much the same sentiment. Seemingly nothing new to see here.

However, there is new insight in Hartwich’s article, as he examines why Germany seems so incapable of listening to the widely available analysis. And perversely, it’s because it might be in their interests to keep the likes of Greece and others in Europe’s ‘periphery’ dependent on Germany. The alternative is to allow the rest of Europe to become more competitive, thereby bolstering their own economies. That sounds good, but from the German perspective, it weakens their relative advantage. Of course, the collapse of the Eurozone would be no picnic either — so the Germans want to avoid that outcome too. But there is a difference between averting armageddon and promoting prosperity. While there is a gulf between the two linguistically, the distinction in policy terms amounts to a very fine line. Europe’s future depends on how well Merkel sticks on her chosen side of that line.