The story often casts Germany as the responsible country, which is now expected to rescue irresponsible Greece, Spain, Italy and so forth. It is certainly true that Germany and most of the northern European countries aren’t facing the same budget crises or debt burdens that their southern counterparts are. However, that is due in part to those southern countries spending lots of money to purchase goods made in northern Europe.
Greek imports of German goods tripled after the introduction of the Euro. Same with Spanish imports. And Portuguese imports. Now that those countries can’t afford their goods, German exports are falling. German exports fell 3.6% in October. And Germany isn’t the only country feeling the pinch. Dutch exports dropped for the first time in two years, down 2% in October.
Clearly, the government of Greece and Italy and the others made poor financial decisions…and it isn’t as if Greece doesn’t have a long history of defaulting on its debts. But let’s not pretend that the budgets of northern Europe were being supported merely by the will and responsibility of its people.