There's a seemingly insuperable urge among some to tell the story of the Euro crisis in racial terms. From today's Telegraph:
Yet even continued gifts under some sort of fiscal union would not bring prosperity, as we see clearly in Italy. Italian unification in 1861 married the Germanic north with the Latin south. The consequent misalignment continues to this day.
Notice how in this story, the northern half of Italy gets temporary promotion to honorary Aryan status—to be retracted, of course, if and when Italy as a whole must be compared to Germany. (It's never clear why Germany does not get the same treatment in comparison to the even more northerly Denmark—or why the fair-skinned Irish should exhibit the same economic behavior as the lesser breeds around the Mediterranean.)
It is true that Italian unification has important lessons for all Europe, but not those the Telegraph writer thinks. At the time of unification, Naples was leading Italy's way to industrialization. The North was comparatively laggard. Unification changed all that, by enabling the conquering North to impose its preferred monetary and trade policies on the whole peninsula. (David Gilmour's The Pursuit of Italy is especially lucid on this point.)
Now we are seeing the same pattern recur continent-wide. The key thing to understand about the Euro is that it presented Germany with a hidden devaluation of the Deutsche Mark and southern Europe with a windfall up-valuation of their local currencies. The Euro incentivized Germany to export more; southern Europe—plus Ireland—to borrow and consume more. The present crisis is composed of the after-shocks.
Europe's problems were made by Europeans jointly. The Germans are every bit as much the architects of the impending disaster as the Spaniards and Italians. It's pure demagoguery for German politicians to present their country as a victim of policies that over the post 10 years enabled Germany to overcome its own history of overpaid labor and over-rigid work rules, and—via a new currency regime—to muscle aside all other European producers on world export markets. It's excessively credulous for outside observers to accept these claims of German victimhood, and much worse for them to concoct pseudo-ethnic rationalizations for such credulity.
