Keep the Family Together

Aristides N. Hatzis

Every divorce has its benefits. Independence is one of them. You can spend your evenings the way you want, eating pizza with your feet on the coffee table or hanging out drunk with your college friends until 4 a.m.
But every divorce also has its cost. During marriage both parties invest in many ways in their relationship and this investment is relation-specific – it’s worthless outside of the particular marriage.
If you are the stronger party in the relationship, with an independent career, a good income and solid prospects, you certainly have the bargaining power and you can set your own terms in the relationship. You might also come to persuade yourself that an “exit” would be costless. It never is.

Germany is the partner with the bargaining power. It’s the party who is not threatened by a divorce. It is the one who can credibly threaten all the others.
Are there any good reasons for a divorce? There always are: Germany would enjoy the advantages of independence without having to be responsible for its “immature” southern partners or for having to share decisions with wishy-washy mommy-figure France. Even former euro zone siblings will breathe freely after the over-achiever leaves the family: a depreciated euro would supposedly boost competitiveness and trim Germany's debts.
But Germany also has a lot to lose. A devalued euro could become the nemesis to an overvalued new deutsche mark as its former dependents could evolve into fierce competitors.
But most of all Germany will lose its investments, both financial and political. Following World War II, Germany left its political pariah status behind and rapidly became Europe's widely accepted leader. Its renaissance came about because of a committed, hard-working German population and because of the kindness of others -- its former enemies. The victors of World War II did not repeat the mistake of the Treaty of Versailles following World War I; they gave Germany a break. And wise German leaders from Konrad Adenauer to Helmut Kohl grabbed the chance, promoting the vision of European unification. They invested in trust, reciprocity, long-term mutual benefit and the inevitability of a common future.
This is a relation-specific investment that Germany should not want to throw away.

Aristides N. Hatzis is an associate professor of law and economics at the University of Athens. He is the founder of the Greek Crisis, a blog, and is on Twitter.

http://www.nytimes.com/roomfordebate/2012/11/12/should-germany-leave-the-euro-zone/germany-should-stay-in-the-eurozone