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By Philippe Legrain ADD COMMENTS

“The primary cause of the crisis was the reckless lending of German and French banks (both directly and through local banks) to Spanish and Irish homeowners, Portuguese consumers and the Greek government. But by insisting that Greek, Irish, Portuguese and Spanish taxpayers pay in full for those banks’ mistakes, Chancellor Angela Merkel’s government and its handmaidens in Brussels have systematically privileged the interests of German and French banks over those of euro zone citizens.

Germany, in particular, remains in denial about its banks’ bad loans. Loath to cede control over its stricken banks, Berlin has used its clout to eviscerate the euro zone’s banking union. Worse, the German government, together with the European Commission and the European Central Bank, wrongly blamed the euro zone crisis on fiscal profligacy across Southern Europe. This self-serving misdiagnosis has inflicted lasting economic and political damage.”

Read my piece in the international edition of the New York Times

Posted 24 Apr 2014 in Blog

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