The Dream Of Europe And The Bailout Of Greece : Planet Money "We need Greece, we need Spain, we need Italy," a cab driver told us. "It's the ending of war and it's the beginning of a new future. It's the dream for European peoples."
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The Dream Of Europe And The Bailout Of Greece

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The Dream Of Europe And The Bailout Of Greece

The Dream Of Europe And The Bailout Of Greece

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(SOUNDBITE OF RIHANNA SONG "UMBRELLA")

UNIDENTIFIED MAN: Hello, and welcome to PLANET MONEY.

CAITLIN KENNEY, HOST:

But in German.

UNIDENTIFIED WOMAN: In German.

UNIDENTIFIED MAN: In German?

UNIDENTIFIED WOMAN: Yeah.

UNIDENTIFIED MAN: Hello, and willkommen to PLANET MONEY.

(SOUNDBITE OF SONG, "UMBRELLA")

JAY-Z: (Rapping) No clouds in my stones - let it rain. I hydroplane into fame coming down at the Dow Jones. When the clouds come, we gone. We Rockefeller. We fly higher than weather in G5s or better. You know me, in anticipation for precipitation, stack chips for the rainy day - Jay.

KENNEY: Yes. Hello, and welcome to PLANET MONEY. I'm Caitlin Kenney.

ZOE CHACE, HOST:

And I'm Zoe Chace. Today is Friday, September 23. That was a couple guys outside a bar drinking at 11 a.m. in Frankfurt you heard at the top. Today in the podcast - you've worked hard, saved money, made sacrifices. Then a total stranger comes up to you. He's like, hey, you don't know me, but I want your money. Would you give it to him?

KENNEY: Today - a country where millions of people are saying, sure, here you go. That's a great idea. We'll explain why they're willing to do that in a minute. But first, the PLANET MONEY indicator with our own Jacob Goldstein.

JACOB GOLDSTEIN, BYLINE: Today's PLANET MONEY indicator - 49.2. The purchasing manager's index for Europe just came in at 49.2 for this month. Right, OK. So what does this mean? So every month, researchers survey thousands of managers at companies all over Europe, and they basically say how is business. Are your customers buying more or less than they were a month ago? And then the researchers, they take all the answers, and they crunch them down into a bunch of numbers. And then they crunch all those numbers down into one single number.

And the key thing you want to know about this number - is it higher or lower than 50 because a number bigger than 50 means that overall the managers say their business is growing. Under 50 means business is shrinking. And this month - again, 49.2 - this is under 50. It means shrinking. And it's actually the first time since 2009 that managers in Europe said business is, in fact, shrinking.

CHACE: So it's happening - Europe's double dip. But it's not really a surprise - right, Jacob? - because if you look at problems in Spain and Italy and Greece like I'm not shocked to hear that people are cutting back. But it's a huge problem right at this moment with the debt crisis because when you have a debt problem, you need economic growth. The more growth you have, the easier it is to pay off your debt.

GOLDSTEIN: Exactly. And conversely, if your economy is shrinking, it makes it that much harder to pay off your debt. One other thing - this report, it does break out Germany and France. And it says that as of right now, Germany and France still are growing but just barely.

KENNEY: All right. Thanks, Jacob.

CHACE: Thank you.

GOLDSTEIN: Thanks, guys.

CHACE: OK. On to the podcast - so as we just discussed, as we keep reporting and as you probably know, there is a crisis in Europe. It's spreading to the rest of the world. And, you know, just yesterday, markets in the U.S., they took their biggest plunge since 2008. People are worried. And a lot of it has to do with events in Europe.

KENNEY: In Europe, a bunch of countries owe a lot of money, and people are wondering if they're going to be able to pay it back. So there's pressure on the richer countries in Europe to help them - to bail them out.

CHACE: The country in the most trouble right now is Greece. The country under pressure to help Greece the most - Germany.

KENNEY: In a week, the German Parliament is going to have to vote - should we put German taxpayer dollars on the line to help Greece? Zoe, you and I just spent a week traveling around Germany talking to people about this, about how they felt about the idea of a bailout. And we were really surprised by what we found.

CHACE: Yeah, so for some background, on our last podcast from Germany, we reported that Germany's economy is in better shape than the rest of Europe. And that's because of really hard choices that German politicians made a decade ago. Workers saw unemployment benefits slashed. Their standard of living went down. Wages dropped. And this was all happening while other European countries were making the opposite choice.

KENNEY: Other European countries were spending more money going deeper and deeper into debt while Germany was cutting back. So it's not a surprise that a lot of people in Germany aren't happy about the idea of bailing someone else out. Our first stop when we got there was to talk to Klaus Frankenberger. He's an editor at one of Germany's biggest daily newspapers, the FAZ.

CHACE: Hello.

KLAUS FRANKENBERGER: (Speaking German).

CHACE: Zoe Chace.

FRANKENBERGER: Nice to meet you.

KENNEY: Hi, Caitlin Kenney. Nice to meet you.

We met him in his office in downtown Frankfurt.

FRANKENBERGER: Germany's economic revival came with a price. And we look around, say, what has Italy done? Answer - nothing. What has Spain done? Enjoyed the party. What has Greece done? Deliberately reduced its competitive, deliberately inflated the public sector. What has Portugal done? Ruin - and Ireland and the rest. And then we are called to show solidarity. Who showed solidarity with us?

CHACE: Frankenberger says it's not just the unfairness of it all. You could argue that these bailouts are illegal. Or at least they break international rules, rules that were set up in the treaty which created the European Union - the Maastricht Treaty. Frankenberger actually keeps a copy of the Maastricht Treaty in his office. He's got little notes in it. And the back is all bent as if he reads it in the bathtub. He's heavily underlined this one section in blue pen.

KLAUS FRANKENBEGER: Oh yes, yes, yes, yes. Article 125 deliberately rules out the bail out of any member state. That's what it says. That's what we've done. Deliberate - we decide to ignore this. It is legitimate to say, well, what we have done since last May of 2010 is violated this treaty here - the EU treaty.

KENNEY: OK, so not fair and possibly illegal - two good reasons to oppose any German bailout of Greece. And a lot of the country feels like Klaus does.

CHACE: But not nearly as many people as we thought. We thought everyone would sound like Klaus - angry, resentful. But when we went and talked to people, we got some surprising answers to the question should Germany bail out Greece.

THOMAS HUTH: What we need very strong countries besides of us.

KENNEY: This is Thomas Huth (ph). He runs a factory that makes steel tanks that hold water or air, and he represents the business-sector view. He says, we need the rest of Europe to be strong because they're our customers.

HUTH: The German economy is very strong. Everybody knows this - you know? And you see around Germany. We find Poland. We find Italy, Greece, Spain, Czech, Belgique. And so Germany need the European community to sell their products. We can only produce and secure our standard of living if we are in a position to sell our products and get money for them.

CHACE: Of course, people like Thomas who support the bailout, they'll make more money. It's good for business. Another group who feels this way is German bankers. They've loaned Greece a lot of money, and they want it back.

KENNEY: But it's not just bankers and businessmen. People who are looking at their bottom line that want this. Everywhere we went, regular people, who you think wouldn't want their tax dollars going to a Greek bailout, said, yeah, we do for all sorts of reasons. We ran into this actor, Dieter Pentescern (ph), taking a smoke break in Frankfurt.

DIETER PENTESCERN: There is the birth of the theater - of the theater we are doing here. So of course, I'm very - I feel very near to Greece and their culture. And it's, you know, democracy and Pericles. And we got to help them out. Yeah, why not?

CHACE: We met a German hanging out with Greeks in Germany who talked about how Greece was the birthplace of Europe - where the idea of Europe was born. We talked to a politician who thinks of Europe as a big family who has to help each other.

KENNEY: Just imagine if President Obama was going around and saying listen. I know things are tough right now. But you know we have to do? We have to bailout Mexico. We have to get them out of debt. Who's with me? Come on - more money for Mexico.

CHACE: Obviously that's a tough sell, and it's really hard to imagine people here going along with this. But in Germany, they are willing to send their money to another country. Why? There's one reason that came up over and over again.

MAURICE MUNOT: German people, it's a history reason. The second World War - we never do something like the second war again.

CHACE: World War II looms large in Germany in ways that I didn't expect. This is my taxi driver in Frankfurt, Maurice Munot (ph). For him and for many Germans, bailing out Greece isn't just about Greece. It's about themselves, their own history and atoning for the 20th century.

MUNOT: Europe, it's the ending of war, and it's the beginning of a new - yeah, future Europe. It's a dream for Europe people. It's for German, for Spain, for French. Since more than a hundred years, it's a dream.

RENATA VILHELM: We had wall behind us against Poland, and now we are friends.

KENNEY: We can't tell you how many times we heard this. Renata Vilhelm (ph) is from East Germany. She's a stylish 60-something woman, and we met her waiting for a train in Frankfurt.

VILHELM: And also is France - it is so wonderful. You can go without a passport, and you have the same money. It is just like we are sisters and brothers. It's wonderful.

CHACE: It's not just for people who lived through it - the older Germans. We ran to this baby-faced kid, Simon Banish (ph) in Berlin. He was wearing an oversized hoodie and swore he was 20.

SIMON BANISH: I'm feeling more like an European than a German. How many years we already have peace - let's say in Europe - about 20 - so after Yugoslavia. So the idea to create a kind of United States of Europe, it sounds interesting and, for me, it makes sense.

CHACE: Still, this just sounded crazy to me - like really? Bailing out Greece today is all about something that many Americans think of as ancient history.

KENNEY: Well, part of it is that Germans just can't be as ignorant of World War II as Americans can. And they've just built in these reminders for themselves everywhere. In Frankfurt, in the sidewalks, there's little plaques outside the homes of Jewish people who were killed. And even at the Federal Labor Office, you can see the buildings where Hitler held his Nazi rallies in the distance. It's still very present.

CHACE: In fact, it's the reason that there is a European Union in the first place.

HELMUT SCHLESINGER: One cannot forget that the whole strengths of having a European Union is based on the fact that we never want to have war between our countries, which we have had so much and so terrible.

KENNEY: This is Helmut Schlesinger, former president of the German Central Bank. He was one of the many German economists who worked for and dreamed of a European Union for decades.

CHACE: Schlesinger says, from the beginning, in the years immediately following the war, the common currency was seen by some as a way to keep Europe peaceful.

SCHLESINGER: There was a particular slogan from a French economist who said there would not be any Europe without the money. Or in other words, the money would make Europe together.

KENNEY: More specifically, the money would bring Germany and the rest of Europe together. For decades, Germany had been the strongest economy, and their currency was the strongest. That scared their neighbors.

SCHLESINGER: It is true that the German politicians - the leading politicians always were influenced by the situation that our neighboring countries and our friends could be too nervous about the economic strengths of Germany.

CHACE: So Germany went into the euro, in part, to send a message to the other European countries, you don't need to be afraid of us. Germany's strength will never again threaten the rest of Europe. Instead, Germany will help Europe to be strong.

KENNEY: This is the reason Germany is on the hook for Greece's debts today because they share a currency - the euro.

CHACE: At the European Central Bank in Frankfurt, you can see how much hope was pinned on this tiny coin, the euro. I got a tour of the European Central Bank while I was in Frankfurt from the head of the public relations department there, a Swede, Niels Bunemann. He's quietly passionate about the shared currency.

NIELS BUNEMANN: Maybe while we are passing by here, I can show you the metal that the euro itself received as a prize.

CHACE: We stopped at a glass case containing a huge metal mounted on velvet - the Charlemagne Prize named for Charles the Great, the last person to rule over a unified Europe 1,000 years ago.

BUNEMANN: Every year, an outstanding person who has done something outstanding for European unity receives this prize. But extraordinarily in 2002, the euro received the prize.

(LAUGHTER)

CHACE: The currency received the prize.

BUNEMANN: The then-president of the ECB Wim Duisenberg, of course, accepted it in the place of the euro.

CHACE: That's helpful because the medal itself is much larger than the euro itself. So this is the history that's tied up in this question should we bail out Greece. For a lot of people we talked to, they can't escape the feeling that Europe is by nature not a peaceful place. We're all crowded on this continent, speaking different languages, having different customs. And for centuries, we were at each other's throats. We invaded and killed each other. The thing that keeps that all at bay is our fragile unions, bound together by our fragile currency.

KENNEY: So you can see what a tough spot the Germans are in right now. This is what the parliament has to deal with. No matter what they do, they break a promise. If they bailout Greece, they put their own taxpayers at risk, and they break the promises they made when they signed the Maastricht Treaty, which created the European Union. Remember Article 125 - no bailouts.

CHACE: On the other hand, if they don't bailout Greece, they break another promise. It's the promise that Germany made to the rest of Europe. We won't act alone. We are with you. We are all in this together.

KENNEY: Next week, the German parliament will have to make their choice. In a recent poll, 65 percent of Germans were against bailing out Greece. But for Germany especially, with all that history, it's hard to act purely in your own self-interest.

(SOUNDBITE OF SONG, "UMBRELLA")

RIHANNA: (Singing) Because when the sun shines, we shine together. Told you I'd be here forever, said I'll always be your friend. Took an oath that I'm a stick it out till the end. Now that it's raining more than ever, know that we'll still have each other. You can stand under my umbrella. You can stand under my umbrella.

KENNEY: As always, we want to know what you thought of today's show. You can email us - planetmoney@npr.org.

CHACE: And find us on Facebook and Twitter. I'm Zoe Chace.

KENNEY: And I'm Caitlin Kenney. Thanks for listening.

(SOUNDBITE OF SONG, "UMBRELLA")

RIHANNA: (Singing) These fancy things will never come in between. You're part of my entity, here for infinity. When the world has took its part, when the world has dealt its cards...

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