Germany is presently being begged, on hands and knees by France, Spain, Italy, Greece and about fifteen other countries, including, perhaps surprisingly, the UK to accept full fiscal union for Europe. If Germany accepted those terms then Bismarck’s dream would be completed. Continental Europe would become a space dominated by Germany in which the weaker southern economies would be annexed to the extraordinary might of German industry and German entrepreneurship.
From a speech by George Soros.
… Germany is likely to do what is necessary to preserve the euro – but nothing more. That would result in a eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments. That would turn the European Union into something very different from what it was when it was a “fantastic object” that fired peoples imagination. It would be a German empire with the periphery as the hinterland.
So if things go this way, Angela Merkel will achieve what Hitler and Kaiser Wilhelm II could not, unwillingly and without firing a shot.
For some of the implications on this side of the pond see The only swing state that really matters in 2012
Why the German reluctance? See three of the photographs at Worthless Currencies. The author (an Englishman living in Italy) is clearly not a fan of Paul Krugman.