The Message to the U.S. in Germany’s Ascension
J.D. Foster /
Germany has taken the clear lead as the European sovereign debt crisis unfolds. This is an obvious outcome because of Germany’s relatively tight rein on government deficits and its policies that have made it Europe’s toughest competitor. Germany’s clear ascension is both good news and bad for Europe, and a clear warning to the United States.
The most recent sign of the European shift in power was Germany’s unilateral decision to ban “naked short selling”, which is a form of speculation whereby one bets that an asset price would go down (short selling), without first borrowing the stock (the naked part). This decision dismayed other European leaders because they were given no advance warning, let alone an opportunity to discuss the policy. Put plainly, Germany broke the standing rules of the cozy little club that is Europe. (more…)