Can Germany Correct Europes Race to the Bottom?
Germany, and Angela Merkel, the German Chancellor, clearly lost the battle over the bailout package and the European Central Bank’s move to buy bonds. (See “Where’s the Leadership in Europe?”) Are Germany and Merkel now trying to stage a “comeback”? There are certainly signs that Berlin is attempting to reassert itself in the moves it made on short selling and other complex bond transactions. Furthermore, Merkel is asserting herself into the financial reform debate. At a meeting of the G-20: “German Chancellor Angela Merkel said Thursday she will push her Group of 20 counterparts to accelerate steps to tighten political control over financial markets and add new taxes on banks. Ms. Merkel also said she will push G20 leaders to coordinate their strategies as they look to withdraw stimulus measures enacted during the financial crisis.” (Details here.) Politically, in the German state itself, Merkel needs to exert herself to defend Germany and its support of a sound fiscal and monetary st
