When Germans start thinking they're being treated unfairly it can lead to big trouble.

[pscot]

http://www.nytimes.com/2010/05/18/opinion/18marsh.html?hp

A little over a week ago, European Union leaders approved a rescue package worth 750 billion euros (nearly $1 trillion) for weaker members like Greece, Portugal and Spain, backed by the International Monetary Fund and the American government. The present crisis extends well beyond its immediate causes: bad decisions in Athens, lack of European leadership and a poor economy. These are but the latest twists in a drama that began more than two decades ago....


Yet even as it predicted the trouble, Germany failed to anticipate that the countries running a trade surplus would inevitably need to finance the southern states’ shortfalls. The five most heavily indebted euro members owe German banks an estimated 700 billion euros (nearly $900 billion), and these German surpluses, once regarded abroad as a symbol of great strength, have emerged as a dangerous source of vulnerability. Most sickeningly for the Germans, the indebted nations are likely to say that their debts need to be reduced or restructured in the name of European solidarity.

A German revolt against the attenuated independence of the European Central Bank appears likely, and could jeopardize parliamentary approval for the rescue package. The Germans feel mistreated by a monetary system that makes them pay for others’ largely self-inflicted misfortunes.

And the trouble is far from over. The austerity programs for errant southern states ordained by European governments and the International Monetary Fund are likely to lead to severe unemployment and civil unrest. Some southern euro members may choose to return to their former currencies — or they may be asked to do so by other states.

An overarching structure for political control over the euro is now being erected. But it is likely to be resisted by Germany, the main paymaster, which rejects any idea that German strength is a root cause of recent disequilibrium....