Where Greece Is Right and Germany Is Wrong

According to BusinessWeek’s Peter Coy, Merkel's hard line on fiscal responsibility is a growth inhibitor. Spending will help prevent a European recession
The patient, E.Z., is in failing health, and the European surgeons are arguing bitterly at the operating table. The Greek doctors call for a feeding tube, oxygen, antibiotics, the works. Nonsense, say the Germans. Get the patient up on his feet and slap him around a little. What he really needs is to lose some weight.

Never mind that each is acting in accordance with his own self-interest. It’s the profligate Greeks, whose screw-ups helped drag Europe into its deepest crisis since World War II, who are mostly right in this argument—and the disciplined, hard-working Germans who are mostly wrong. Europe’s economy is already so weak that Teutonic belt-tightening, however meritorious in ordinary times, threatens to push the Continent into a deep and long-lasting recession.

The European stimulus-vs.-austerity debate that raged throughout 2011 is a replay of the one from the Great Depression…..

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