Germany vs Britain: a crunch punch-up

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http://www.telegraph.co.uk/finance/f...-punch-up.html
It looked like a dour match-up between two like-minded sluggers: weighty Lefty Gordon Brown in the blue corner, weighty Lefty Peer Steinbrück in the red. But suddenly, the face-off between Germany and Britain has turned into the EU’s very own Rumble in the Jungle: the Punch-up in the Crunch-up.
Steinbrück, and Germany behind him, is playing the George Foreman role. Steady, predictable, he is backed by the huge hitting of the world’s biggest export economy. “Crass Keynesianism,” he mutters of his opponent’s flashy style. “Tossing around billions.”

And where Brown was once so enthused by prudence that he was unwilling to hazard the jabs of boom and bust, he is now dancing Ali-like around the ring, with his fiscal guard down. His mouth is working Ali-style, too. “We saved the world!” he brags. His own moves are “ambitious and co-ordinated”. Float like a butterfly, Gordon, float like a butterfly.

But just why are our two countries going toe-to-toe? The rapturous response in Britain to Germany’s World Cup of 2006 seemed to signal a definitive end to our military and sporting conflicts, at least among those born after the Second World War, but just two years later, we are antagonists once again. All it took, it seems, was the greatest financial upheaval in more than 100 years.

“Germany thinks it’s doing well managing this crisis,” explains John F Jungclaussen, Die Zeit’s UK correspondent. “And then you get these pompous, hyperactive, noisy people in London telling us we’re not doing enough, not daring enough, not moving fast enough.” In fact, Berlin is thoroughly ticked-off with being lectured by us. Being told to get its act together and send more troops to Afghanistan is bad enough for a nation rightly sensitive about its wartime past, but Gordon Brown’s hectoring summit manner makes it all the worse.

Herr Steinbrück has an even better excuse for feeling a little tetchy. Like a responsible child, he has been saving up for the one present he really wants: a balanced budget. Year after year, the coins tinkled into the piggy-bank, ready for the day when a country that has poured 100 billion euros into re-embracing and re-developing its dilapidated east, and where every taxpayer still hands over six per cent of wages to do the same, could unwrap account books that are in the black again.

This is the part that Germany loves to play: a role-model of fiscal responsibility. A slew of countries may have broken the EU’s national debt guidelines earlier this decade, but no one felt the shame of doing so more keenly than Germany. Then things got back on track: deficit targets were met, and suddenly Herr Steinbrück was on target to balance the budget. In September last year, he declared that Germany in 2008 should be “slightly in the black”, and even as late as this summer he was willing to bet half a case of wine that the budget would be balanced – for the first time in four decades – by 2011.

Then came winter. Suddenly, fiscal stimulus was the watchword – led from London, with French President Sarkozy and European President José Manuel Barroso in attendance. Chancellor Angela Merkel wasn’t even invited to their mini-summit this week, as Gordon Brown got out his hammer and began smashing up Herr Steinbrück’s beloved piggy-bank.

The attack was made all the worse because it felt like betrayal. Germany likes to think of itself as an economy framed by a liberal ideology, and considered the UK an exemplar of the type.

“We want to be liberal, we like to think of ourselves as liberal,” says Ulrike Guerot, head of the Berlin office at the European Council on Foreign Relations. “It’s about self-perception. We are export champions, we have a good football team, we have lots of small and mid-sized companies fuelled by an entrepreneurial spirit, so we see ourselves as liberal.”

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