What "Germanisation" means
The eurozone, the European currency union, isn’t an effective union (and the eurozone will fail) unless all the countries have joint responsibility for each other - just as occurs within the United Kingdom or U.S.
Germany, rightly, is resisting such burden sharing, as it would suffer most as the greatest contributor to bail out peripheral Europe.
So they effectively told the rest of the eurozone on 9th December:
“Firstly you must get your house in order now, getting your debt under control”.[This requires more austerity, and some nations being in depressions for years to come]
“Secondly, you adopt our standards, you play by our rules, rigorously applied, and then we will accept burden sharing with our fellow eurozone members” [So not only will we not accept joint responsibility until your current debt is down to acceptable levels, but we also require iron standards, independently monitored and enforced, for the future]
Timing? It could take years (2020?) before debt is down to levels acceptable to Germany.
In the meantime, will eurozone voters accept deep austerity and depression? Higher unemployment, lower pensions, salary cuts, higher taxes - Greece is the template.
One way to short-cut this process is for individual countries to default on their debts.
Iceland opted for default in 2008. And this year their credit rating went up!!
So it really comes down to two choices for the indebted nations:
- default: endure lots of pain over a short period and recover quickly (like Iceland)
- Germanisation: austerity, years of pain, lots of time for much more to go wrong