German Violations of Eurozone Rules Initiated Euro Crises – German Media

The Greek crisis is not an exceptional case, but a signal of a general lack of discipline within the Eurozone, DWN wrote.

Initially, Northern European countries and especially Germany agreed to give up their hard currencies, including Germany’s “beloved German Mark” under the condition that European politicians would strictly follow the iron stability rules and receive corresponding punishment in case of their violation.

Indeed, the first years of the Eurozone were “not bad.” In particular, the southern countries enjoyed growing economic activity due to lower interest rates, particularly by the real estate booms. Unfortunately, the euro countries did not use those “happy days” for competition-enhancing structural reforms, but rather for increasing government debts. And they had to bitterly pay for their negligence later, DWN wrote.

According to the newspaper, in 2001-2005, Germany violated the new debt criterion five times. However, the country has never been punished for this and managed to avoid sanctions with the help of France, Italy and Greece.

Since then, the meaning of good stability policy remained only on paper. This was the start of the current political indiscipline, which reached its peak with Greece this year. 

According to DWN, the current situation will not lead to the collapse of the Eurozone. Moreover, the euro will not fail when Greece withdraws from the monetary union.

However, the newspaper noted that if violations of the stability rules will further be tolerated, the Eurozone has no chance for survival in the long-run.