The spectre of history looms over the eurozone crisis and Germany’s role in it, but it has less to do with Nazism than with the traumas and economic woes of the 1920s.
As the eurozone staggers from one crisis to the next, a growing consensus of opinion blames the Germans for the impasse. Europe's most powerful economy, Germany stubbornly refuses to sanction what seems to many the obvious way out, which would involve the European Central Bank (ECB) printing money to lend to countries such as Italy that have accumulated more sovereign debt than they can cope with. The new cash flow would enable bondholders of government debt to be paid. Quantitative easing would stimulate demand as people and businesses spend the extra currency, kick-starting national economies and helping them to get over the crisis. Yet Angela Merkel's conservative-led coalition in Berlin refuses to sanction this obvious step and the crisis continues.
So, Germany is the key to the problem. It's the German government that's calling the shots with its insistence on austerity, spending cuts and financial self-flagellation as the solution. After failing to implement this programme with sufficient rigour, governments in Greece and Italy have fallen and politicians have given way to technocrats willing to implement the economic programme that Germany demands.
Eurosceptics in Britain are delighted. "What we are witnessing," wrote Simon Heffer in the Daily Mail, "is the economic colonisation of Europe by stealth by the Germans. Once, it would have taken an invading military force to topple the leadership of a European nation. Today, it can be done through sheer economic pressure." This is, he says, the "rise of the Fourth Reich", in which Germany is "using the financial crisis to conquer Europe". Fiscal union, favoured by some as the long-term solution, "would make Europe effectively a German empire" and lead to "a loss of sovereignty not seen . . . since many were under the jackboot of the Third Reich".
Heffer's alarmism is echoed by that of the Guardian's resident Eurosceptic Simon Jenkins, who says that it is "a massive irony that old Europe's last gasp should be to seek . . . German supremacy", which would bring us "back to the ghoulish first half of the 20th century". It's a good thing, he muses, that modern "Germany has no panzer divisions". We haven't seen this kind of language since the 1990s, when German reunification led to a spate of Germanophobic commentary in politics and the media, inspired by Margaret Thatcher, who, with a group of historians she had convened at Chequers, reportedly discussed the "abiding part[s] of the German character: in alphabetical order, angst, aggressiveness, assertiveness, bullying, egotism, inferiority complex, sentimentality".
The Economist warned that a united Germany might want its own nuclear deterrent. The political commentator Conor Cruise O'Brien described the reunited nation baldly as the "Fourth Reich". The language of the Second World War entered political discourse, as the arch Eurosceptic and Tory MP Bill Cash published a book entitled Against a Federal Europe: the Battle for Britain, warning: "The German attitude to Europe [is] . . . determined by a massive historical heritage." A federal Europe, he declared, would, in effect, be "a greater Germany, balancing uneasily between east and west, inheriting and perhaps magnifying the complexes and instabilities of post-Bismarckian Germany".
By the mid-1990s, Germanophobia and Europhobia on the right had become fused in a bizarre rhetorical rerun of the Second World War. The conservative historian Andrew Roberts published a novel, The Aachen Memorandum, which portrayed a future European Union dominated by the Germans, who call it the Fourth Reich when nobody's listening, and in which patriotic Brits are routinely arrested by a Gestapo-like police force for doubting the legitimacy of the European project.
Around the same time, Roberts's fellow conservative historian John Charmley declared, "Germany is rather like a nanny who is perfectly civilised and charming most of the time but who, suddenly, with no warning, is liable to bash your baby's head against the wall - and then ask for your sympathy and understanding, because it was not her fault. At the moment, the Germans are in their civilised and charming mode but, as the older generation knows only too well, it was not too long ago that they were bashing babies."
The anti-German mood and the equation of Germans with Nazis spread far beyond the right, culminating in the notorious lead story in the Daily Mirror on 24 June 1996, previewing the European Football Championship encounter between the English and German teams: "Achtung! Surrender. For you, Fritz, ze Euro 96 championship is over. Mirror declares football war on Germany . . . England's old enemy . . . defeated in two world wars
and one World Cup."
A decade later, this mood had largely subsided, even on the football pitch. The fears of a Fourth Reich have not been realised. Rhetoric such as Heffer's or Jenkins's is an unthinking throwback to the language of the post-reunification years, even more ignorant and hysterical now than it was then. Yet stripping away the crass parallels with the Nazis does not get around the reality that Germany is indeed calling the tune in the eurozone crisis.
There's a new, quiet self-confidence in Berlin. Merkel and her government, along with bankers, economists and commentators in Germany, clearly don't feel the need to apologise to the rest of the world for the horrors of Nazism any more. This may have something to do with how Merkel grew up not in West Germany, where, from the 1960s onwards, there were impassioned public debates about how best to remember and atone for the crimes of the Third Reich, but in East Germany, where citizens were taught from an early age to identify with the communist resistance (much inflated in retrospect) and therefore to have no guilty feelings about the Nazi past. It's no accident that neo-Nazism is at its most threatening and virulent in the poorer areas of the east and is a political force hardly worth worrying about in the west.
But present-day Germany hasn't put the past behind it. Merkel has rapidly adapted to the political and memory cultures of the west - this is part of the secret of her success in German politics. In politics and the media, the past is still passionately debated. Some have argued that it is time to remember how Germans, too, were victims earlier in the century, with the mass bombing of German cities and the death of half a million civilians in the raids, the mass rape of more than a million German women by soldiers of the Red Army in 1944-45 and the expulsion or enforced flight of between 11 and 14 million Germans from eastern Europe between 1944 and 1947, in circumstances so brutal that hundreds of thousands died. Yet this has been a minority opinion. Anyone who goes to Germany regularly will see how memorialising Nazism, its crimes and its victims has become an integral part of national identity in the post-reunification era, far outweighing the counter-current that portrays Germans as victims.
At the centre of Berlin is a museum and a memorial to Nazism's Jewish victims. Public reminders of the camps are everywhere. The camps themselves, crumbling and neglected for decades, have been restored and transformed into didactic museum sites as powerful reminders of the horrors they visited on Nazism's victims. In the city of Hamburg, small brass plaques have been set into the pavement outside former Jewish-owned houses, reminding passers-by of the names and fate of the people who once lived there. The British are sometimes accused of being obsessed with Nazism but the same could just as easily be said of the Germans, who teach its history to their children in schools at almost every stage of their education and show films about it on television and in the cinema constantly.
The paradoxical effect of all this, however, has arguably been to instil in German culture a feeling that the honesty and thoroughness with which the crimes of Nazism are being remembered and memorialised is a cause for celebration and self-congratulation - Germany has come to terms with its past by enshrining it as a part of national culture and has nothing to feel ashamed of in the way that it atones for those crimes. The bitter debates that convulsed the nation in the late 20th century have not entirely died down, as the recent controversy over the role played in the Holocaust by the old-style diplomats who staffed the German foreign office during the Nazi period has shown. Yet there is a new maturity about the German attitude to the Third Reich underpinning the confidence with which the German political class appears on the world stage.
Historical memories play a role in an entirely different, though not entirely unrelated, way. Dominating the German approach to the eurozone crisis has been the trauma suffered by the country in the 1920s, when Germany's first democracy, the Weimar Republic, was fatally undermined by its economic woes. At the end of the First World War, the Allies imposed on Germany a huge bill of reparations to pay for the damage they had caused by invading France and Belgium. The economist John Maynard Keynes warned of the fatal consequences that this could have for the German economy.
In fact, the economy was potentially strong enough to pay. The problem was that successive governments refused to raise the taxes needed to do it, because their opponents would have charged them with taxing the Germans to pay the French, with the inevitable result of defeat for the government at the next election. So they printed money instead, just as the kaiser's government had been doing since the beginning of the war in the expectation of being able to back up the inflated currency by annexing productive industrial areas of the European continent. As the currency continued to outstrip the economy's ability to back it, so money began to lose its value.
If you wanted to buy a US dollar in 1913, it cost you four German marks; by the end of 1921, it cost you around 200; a year later, 7,000.Governments could no longer afford to pay reparations, since they had to be rendered in gold. Things got really bad in 1923, when France invaded Germany's most prosperous industrial area, the Ruhr, to extract the reparations that the Germans had failed to deliver. Strikes ensued, the German economy ground to a halt and inflation spiralled out of control.
By July 1923, a dollar cost 353,000 marks; by August, nearly five million; by September, nearly a hundred million; by December, 4.2 trillion - or four followed by a two and eleven zeros. People were collecting their wages in wheelbarrows filled with million-mark notes and rushing to the shops before the price spiralled upwards again and goods were out of their reach. You might sit down in a café for a cup of coffee and find that its price had doubled by the time you got up.
The political system began to disintegrate. Hitler staged his beer-hall putsch. There was a communist uprising in Hamburg and the threat of one in the east. Separatists emerged in the Rhineland. The chaos was only ended when the Americans were persuaded to lend money for a currency reform.
The hyperinflation did not destroy the Weimar Republic. What did for it was the ensuing depression, when the Wall Street crash led the US banks to withdraw the loans that had underpinned the modest recovery of the middle Weimar years. Mass unemployment had the jobless rushing to vote for the communists, terrifying the middle classes, already disoriented by inflation, into supporting the Nazis.
Economic recovery came under Hitler but not because of his much-trumpeted job-creation schemes, which in reality were propaganda exercises when they were not rearmament in disguise. It was rearmament and then war that pushed the economy into overdrive and while the first led to a massive clampdown on consumer spending, diverting it into preparations for war and depriving the ordinary German of most of the benefits of economic growth, the latter brought, in the end, nothing but death, destruction and defeat. German folk memory still recalls the miserable living conditions of the years between 1943 and 1948, when people depended on the black market to survive and inflation once more threatened to get out of control.
Germany today is the product of the "economic miracle" of the 1950s and 1960s, when rapid recovery from the devastation of the war fuelled a prosperity and stability in the German economy that finally reconciled ordinary Germans to the virtues of democracy. What the Weimar Republic had failed to do, the Bonn republic finally achieved: it convinced Germans that political democracy could deliver economic prosperity.
You have only to imagine what life was like for a German born in, say, 1910 to realise what this meant: a childhood spent amid the violence and deprivation of the First World War, with an Allied economic blockade leading to the death of more than half a million Germans through starvation and related diseases; the hyperinflation and political violence of Weimar's early years and then the mass unemployment that put a third of the workforce out of a job by 1932, coming along just at the time when someone born in the run-up to the First World War was entering the job market.
Then, in 1933, the Nazi seizure of power, followed by mass conscription in 1935 and continuous warfare from 1939 to 1945. If you survived that, there were more years of inflation and poverty until the currency reform of 1948 began to put things right. During the economic miracle, Germans in their forties experienced peace, prosperity and stability for the first time in their lives. No wonder they clung to it; no wonder Germans cling to its memory; no wonder it has served as the foundation of everything Germans today hold dear.
The trauma of inflation and hyperinflation, however, has had a lasting effect. I witnessed this in daily life during my stays in Germany in the 1970s. When I first arrived, it quickly became obvious that Germans did not trust bank cheques. Everything had to be paid in cash. I remember standing in a queue at a bank, watching the person in front of me withdraw 10,000 Deutschmarks, which he was most likely going to use to buy something like a car. Germans remained deeply suspicious of credit cards at a time when they were becoming a standard means of payment in the UK.
These everyday fears have now been overcome. Yet the lasting memory of inflation still plays a role. Asked why Germany was not willing to let the ECB print money to tackle the sovereign debt crisis in Italy, the head of a major economic research institute in Munich replied: "Because it leads to inflation. We know this from our own history. It's what Germany did until 1923."
Newspaper headlines in the popular press have damned the attempt by the US at the recent G20 summit in Cannes to mobilise the Bundesbank's gold reserves as "a grab for our gold", which would inevitably fuel inflation. Merkel knows that she is in deep enough trouble with the German electorate as it is. Sanctioning the printing of money by the ECB would almost certainly destroy any chance she has of re-election.
The spectre of history looms over the eurozone crisis and Germany's role in resolving it but it's not the spectre of Nazism, still less of a rampant and resurgent German drive for European domination. It's not ambition that lies behind the German stance - it's fear, even paranoia, deeply embedded in the national political culture. It is a fear that Germany needs to overcome.
It is easy enough to make a case that fiscal policy in countries such as Greece and Italy has been too lax. However, the fundamental problem lies not in the irresponsibility of governments but rather with the credit crunch, whose origins lay primarily in the greed of banks and mortgage lenders, and which has led to impoverishment and unemployment, causing governments' tax revenues to fall to such an extent that they can no longer afford to repay their debts. Entrenchment and austerity, without a simultaneous attempt to find ways to stimulate the economy, are little more than a way of deepening the recession, as we have been discovering in the UK.
So, German-style fiscal discipline is all very well but it is not going to solve anything in the short run. That is why it is important for the Germans to throw off the shackles of national memory - in this instance, at least - and get down to trying to revive the European economy, instead of accelerating its downward spiral.
Richard J Evans is Regius Professor of History and president of Wolfson College, Cambridge. He is the author of "The Third Reich at War" (Penguin, £12.99)